Vietnam: current direction

Briefly about the main thing

When you find yourself in Vietnam, it is impossible not to notice the spirit of youth that reigns on the streets of its cities and resorts. The atmosphere of optimism and rapid development permeates everything around. This is the main characteristic of the local real estate market: it is very dynamic, with a predominance of "primary" supply and very active buyer demand.

Experts note that construction in Vietnam is carried out at such a rapid pace that it is difficult to name the average prices per square meter of housing: they increase exponentially not only depending on the location of the new facility, but also on the basis of the completion of the construction stages of the building. So, at the time of the off-plan, the price will be one, as the floors are built, another, at the time of commissioning of the house, the third, and after that, when the status of the building goes into residential, the fourth. And the difference in the cost of buying an apartment between the excavation stage or an already inhabited building can be 100% or higher.

Also noticeably affects the cost of new apartments and the status of the building, that is, its "stardom". Developers offer buyers economy-class housing, mid-price segment and luxury real estate with expensive finishes from leading brands. In a "five-star" residential complex located at a distance from the seashore, the cost of an apartment can be an order of magnitude higher than for housing with a similar square footage in a mid-price segment complex located on the first line.

A characteristic feature of the Vietnamese real estate market is also the fact that the citizens of the country themselves are very active buyers. The laws of the state do not allow them to "withdraw" funds abroad, and therefore local residents are willing to invest them in real estate. The Vietnamese account for 95% of the market in Vietnam. For investors, this is a good indicator: they can be sure that the right property will always be in demand and, if necessary, can be quickly and profitably sold to both a Vietnamese citizen and a foreigner.

Why Vietnam?

• Vietnam is an amazingly picturesque state of Indochina with rich nature, clear sea and sunny weather;
• It has an interesting geography: within one country there are UNESCO-protected bays, tropical forests, sand dunes, and fantastic sea bays;
• There is a developed modern infrastructure of life and recreation, including family;
• There are many attractions in the country, both historical (temples, tombs of emperors, monuments of the Vietnam War), natural (nature reserves, nature reserves, tours of the Mekong Delta, etc.) and urban (old streets with "history", museums, colonial buildings);
• Food, fruits, vegetables and seafood are of the highest quality. The local diet promotes rapid recovery of the body;
• Locals treat Russians and foreigners in general very well;
• In Vietnam, life is easy and peaceful, there is no pressure from the state and its constant control;

• The tourist season lasts almost 12 months a year. Asians rest here in summer, Europeans in winter;
• You can successfully combine vacation with investments — come to the purchased property for a vacation twice a year, the rest of the time it is profitable to rent it out;
• Excellent opportunities for "quick profit": you can always profitably resell an apartment in a new building for more;
• Prices are still low in Vietnam. This also applies to real estate. But it is worth bearing in mind that housing is constantly getting more expensive;
• On the first coastline in Vietnam, real estate prices are still the lowest in comparison with other popular Asian countries;
• It is very convenient to get to Vietnam from Russia: there are several direct comfortable flights, and many charters fly during the season;
• For Russians, there is a simplified visa regime, and obtaining a residence permit is not a problem.

Features of national demand

Vietnamese, of course, actively acquire all the objects on the market, but Vietnamese families are mainly focused on buying houses. However, such real estate is not quite suitable for foreigners. Firstly, due to the small area of the country, land here is very expensive. Secondly, for the same reason, houses are built here on tiny plots of land. Narrow, elongated towers, not quite the usual housing for a Westerner.

It is also worth bearing in mind that a foreigner's dream of his own a house on the sea in Vietnam may be difficult to implement, or you will have to spend an impressive budget on a completely non-Asian scale. A house built taking into account the above features, close to the beach, can cost from $ 500,000. And in the case of such a purchase, the land will cost more than the building itself on it. For example, a small plot of 1000 sq. m. m on the second coastline in Nha Trang is on sale today for $8-10 million. In this regard, foreign investors who want to open their hotel business here, buy whole floors in condominiums, turning them into mini-hotels.

In addition, the registration of a house as a property for citizens of other countries is possible only in the name of a company opened in Vietnam, 100% of whose shares are its founder. As in other Asian countries, the land at the conclusion of such a transaction is leased for a long term for 50 years. Very rarely in the country there are proposals from developers building so-called New Urban Areas, on the territory of which you can buy a villa "directly", but this is rather a serious exception to the rules than a common practice. But, of course, if you want to buy a house and apply to a Vietnamese real estate agency, you can do it without any problems: a reliable realtor will help you open a company and go through all the stages of the transaction.

What foreigners buy

Foreigners mostly buy in Vietnam apartments in new projects. It's reliable, it's profitable, it's still much cheaper than in neighboring Thailand, China and Malaysia. Such an investment brings a stable high, especially with European rents, income of 8-10% per annum, due not only to the high level of demand, but also to the actual year-round seasonality (in fact, the "season" in Vietnam lasts 10 months a year). 

Of course, the largest volume of real estate transactions in Vietnam falls on buyers from neighboring Asian countries - Korea and China. But at the resorts, Russians confidently take third place. Along with the rapid number of Russian tourists, the demand for real estate is also growing. Thus, the number of guests from our country at the popular Vietnamese resort of Nha Trang has been increasing by 40% annually in recent years.

On average, about 80% of foreigners buy real estate in Vietnam for investment purposes and 20% for permanent residence. As in any other countries, representatives of Russia and the post-Soviet countries are in the greatest demand for housing by the sea - the closer to the first coastline, the better. As for Asians, in addition to resort housing, representatives of the business elite are actively acquiring real estate in the two capitals of the country - north, Hanoi, and south, Ho Chi Minh City. The cities have everything you need for a successful business, they offer excellent infrastructure for permanent residence and interesting objects of the premium segment.

Regional features

Vietnam can be divided into three parts - northern, central and southern. To the north of the country, first of all, belongs the capital Hanoi - the northern port and the political center of the country. Russians practically do not buy real estate here, but apartments in new projects are in stable demand among the Asian business elite.

The central part of Vietnam is, first of all, Da Nang, where the Consulate General of Russia is located. This is a large, developed city, real estate prices in which start from $ 100,000. But at the same time, only one ready-made residential project is presented here, while the rest are under construction. The historical place of Hoi An in this region is rather interesting only from a tourist point of view. If you liked it, it's better to just rent a property here.

The southern region is the resorts of Nha Trang, Mui Ne, Vung Tau, the nearest city to Ho Chi Minh City, as well as the cultural capital of Ho Chi Minh City (Saigon).The most popular among Russians of all these places is Nha Trang, where good housing can be bought from $40,000. Every year more than 540,000 of our compatriots come here to rest, and their number is constantly growing. Experts note that this is an excellent investment destination, where you can combine a great sea vacation with getting a decent vacation from renting.

In the kitesurfing paradise of Mui Ne, stretching along the seashore, where the winds are constantly blowing, prices start from $80,000, but the offer of ready-made objects is quite small, there are several projects under construction. Mui Ne is suitable for family holidays, but from the point of view of investment, it is better to look at Nha Trang. Vung Tau is not so popular among our compatriots, although there is a "village of oilmen" representatives of our country. Those of them who want to get their own housing here should count on a budget of about $60,000.

In Ho Chi Minh City, the market is represented by prestigious housing, which is bought for investment, and prices start from $150,000. The southernmost real estate in Vietnam is located on Phu Quoc Island, where interesting investment projects are being built. So, condotel apartments will cost from $200,000 here and will bring 8% per annum. According to the standard conditions from developers, the owner-investor can live in them 15 days a year, the rest of the time renting out real estate through a management company.

Prices

The cost of real estate in Vietnam is characterized by the general rapid dynamics of the market: they are constantly growing. More specifically, as mentioned above, everything depends on the stage of construction, the status of the residential complex and its location. The starting cost is considered to be the amount of $40,000 for medium-level facilities at the project stage or new apartments in budget residential complexes. It is impossible to count on lower amounts, contrary to the expectations of many foreigners, in Vietnam.

For example, consider housing prices in the popular resort of Nha Trang. Ready-made apartment of standard layout, with three bedrooms, with an area of 58 sq. m. m from a "budget" developer on the first coastline will cost $75,000 with furniture $65,000 without furniture. At the off-plan stage, the same apartment was sold for $37,000, a year later its price rose to $50,000 and after the completion of the project was $65,000 unfurnished. An apartment with similar parameters in a five-star complex, not necessarily located by the sea, will cost from $130,000.

Rent

Rent in Vietnam is in high demand, and the supply of housing does not actually satisfy the enormous demand observed in popular resorts. Investors should keep in mind that real estate will bring income here for at least 10 months a year. The average annual rental yield is 8-10% per annum, regardless of the characteristics of the object. Such indicators are typical for both budget and premium housing.

As for the methods of managing rental properties, it can be a management company for a condominium with a guaranteed rate and a fixed period of stay of the owner in his home, which, as a rule, is two weeks a year. And also — « free» rent, which is carried out with the help of a real estate agency.

Features of the transaction

Recall that until July 2015, foreigners did not have the right to purchase real estate in Vietnam. But since 2015, the country's authorities have provided them with such an opportunity on the following conditions. Both in new and residential buildings of the secondary market, citizens of other countries have the right to purchase in their own name in 30% of the apartments in the building. If we are talking about a cottage settlement, then it should be no more than 250 houses of the project. Experts note that the quota of 30% is rarely filled to the end, especially when it comes to buildings under construction.

The purchase and sale transaction is executed in one day. After the conclusion of the contract, the buyer pays a deposit and must pay the full amount of the contract in time, which in most cases is one to two weeks. The size of the deposit depends on the characteristics of the object and on average for a budget apartment can be $3000, for medium-price housing $ 5000, for elite - $15,000. It is worth noting that the deposit is necessary not only for the buyer, but also for the seller, including because the price of the object can significantly increase in just one month. If the seller suddenly decides not to sell his object, then he is obliged to pay the buyer the deposit amount in double. And if the buyer terminates the contract unilaterally, the deposit amount is irrevocable.

Additional costs

There is no real estate tax in Vietnam, neither when buying a home, nor afterwards. Upon receipt of the certificate of ownership, the buyer once pays a registration fee of 0.5% of the value of the object, the amount of which is $ 200-1000 and is calculated based on the price of the purchased property. For new buildings, 2% of the cost of the apartment is also paid for communal repairs. As a rule, this fee is already included in the stated price.

As for housing and communal services, the amount of costs here is quite small: an elevator, garbage collection, security, parking cost the owners about $ 15-25 monthly.  And electricity and water by-meters. Water is inexpensive $5 per month. The most expensive — light on the counters. The minimum amount in winter, without the use of air conditioners, will be $30 and will rise to $50 in summer, when air conditioners are actively used.

Residence permit

Russians can rest in Vietnam without a visa for 15 days according to a stamp that is put on arrival. If necessary, travel or real estate agencies can issue an invitation valid from a month to a year, the cost of which will be from $ 15 to $ 350.

A residence permit in Vietnam is also issued with the help of a real estate agency on the basis of the opening of a legal entity. It can be either an existing company where a foreigner owns 1% of the shares, or a new company with a 100% stake in the event that a citizen of the country has plans to do business in the country.

It should be borne in mind that there is no such "scheme" of residence on a residence permit, as in Europe, in Vietnam, and obtaining a residence permit is not a basis for obtaining the status of a resident of the country. Also, Vietnam does not support dual citizenship. Therefore, its receipt is not justified for Russians who need to visit their homeland.

Five expert tips for anyone thinking about buying a home in Vietnam:

1. Plan your budget in advance. Keep in mind that there is no super-budget housing in Vietnam, and prices start from $40,000.
2. Find out the availability of the selected object and the relevance of the price at least two weeks before the transaction, because the market is very dynamic, and the price could rise while you were thinking.
3. Have money on hand and if you liked the object, hurry up to make a deposit.
4. Contact a trusted real estate agency and do not rely on your own strength or casual acquaintances in the search for an object. Give preference to agencies with extensive experience in Vietnam and real customer reviews.
5. Choose the right region and keep in mind that the object for rent and for your own residence should have their own characteristics. A reliable real estate agency will help you make the right choice.

Portal HomesOverseas.ru thanks Anna Gerus for her help in preparing the article (ZIMAVTEPLE).

_{photocredits: dmitry kruglyak / flickr / zimavteple}