Law amendment proposed to clear congestions for real estate market

Vietnamese people’s demand for foreign property, especially in the US, has been increasing in recent years. Experts say this increase can be attributed to Vietnam’s fast growing economy and Vietnamese people’s belief that the US is a good place to live and work. A report by the US National Association of Realtors (NAR) showed that between April 2016 and March 2017, Vietnamese buyers purchased approximately 5,689 residential properties in the US, roughly double of the previous 12-months period. According to the NAR report, it is estimated that Vietnamese buyers spent up to $3 billion on residential properties in the US in 2017. The amount of property purchases made by Vietnamese nationals has been on the rise since 2012-2013. The report also indicates that Vietnamese buyers tend to favour properties in California, Florida, and Texas. Explaining why Vietnamese people are buying more property in the US, some real estate experts say that in addition to increasing demand, housing prices in markets like the US and Australia are considered fairly affordable to the fast-growing upper-middle class of Vietnam. PricewaterhouseCoopers placed Vietnam among the fastest growing economies in the world, and according to The Wealth Report 2017 by Knight Frank, Vietnam’s ultra-wealthy population has the highest growth rate in the world. The fast-growing economy also attracts international real estate companies which give Vietnamese better access to foreign real estate markets. The increasing income also allows middle and upper-class Vietnamese to buy into what they believe a…... [read more]

Real estate has become the most popular asset class among retail investors since gold and foreign currencies are not very profitable any more. Minh Hanh of HCM City’s Tan Phu District, for instance, said: “I never put my money into saving accounts because I used to invest in gold and dollars. But now I invest my money in real estate and stocks because gold prices have decreased sharply and the gap between domestic and international prices is too big.” Since 2010, gold has plateaued. The Government has tightened gold management and banks are not allowed to mobilise or borrow gold any more. This year, the real estate market has gathered pace and been a magnet for investors. Duc Vinh of HCM City’s Go Vap District said last October he had bought a piece of land for VND2.6 billion ($115,000) and planned to build a house. But half a year later, a buyer offered VND3.5 billion ($155,000) for it and he sold it immediately. But Vinh’s profit is not considered huge in the current market situation. Hoang An, a broker in District 12, said now everybody wants to buy land because of high profits and liquidity. Things have turned on their head from a few years ago when prices were low yet it was difficult to sell land. “Bank savings interest rates are very low, gold and dollars do not yield high returns and investors are looking for better investment opportunities,” An said. “Inflation has been controlled well in recent years…... [read more]

Real estate has become the most popular asset class among retail investors since gold and foreign currencies are not very profitable any more. — Photo baodautu.vn Real estate has become the most popular asset class among retail investors since gold and foreign currencies are not very profitable any more. Minh Hanh of HCM City’s Tan Phu District, for instance, said: “I never put my money into saving accounts because I used to invest in gold and dollars. But now I invest my money in real estate and stocks because gold prices have decreased sharply and the gap between domestic and international prices is too big.” Since 2010, gold has plateaued. The Government has tightened gold management and banks are not allowed to mobilise or borrow gold any more. This year, the real estate market has gathered pace and been a magnet for investors. Duc Vinh of HCM City’s Go Vap District said last October he had bought a piece of land for VND2.6 billion ($115,000) and planned to build a house. But half a year later, a buyer offered VND3.5 billion ($155,000) for it and he sold it immediately. But Vinh’s profit is not considered huge in the current market situation. Hoang An, a broker in District 12, said now everybody wants to buy land because of high profits and liquidity. Things have turned on their head from a few years ago when prices were low yet it was…... [read more]

Real estate has become the most popular asset class among retail investors since gold and foreign currencies are not very profitable any more. Real estate has become the most popular asset class among retail investors since gold and foreign currencies are not very profitable any more. Minh Hanh of HCM City’s Tan Phu District, for instance, said: “I never put my money into saving accounts because I used to invest in gold and dollars. But now I invest my money in real estate and stocks because gold prices have decreased sharply and the gap between domestic and international prices is too big.” Since 2010, gold has plateaued. The Government has tightened gold management and banks are not allowed to mobilise or borrow gold any more. This year, the real estate market has gathered pace and been a magnet for investors. Duc Vinh of HCM City’s Go Vap District said last October he had bought a piece of land for VND2.6 billion ($115,000) and planned to build a house. But half a year later, a buyer offered VND3.5 billion ($155,000) for it and he sold it immediately. But Vinh’s profit is not considered huge in the current market situation. Hoang An, a broker in District 12, said now everybody wants to buy land because of high profits and liquidity. Things have turned on their head from a few years ago when…... [read more]

By cooperating with local businesses, the investment wave from Japanese enterprises into Vietnam’s real estate market continues to grow strongly. According to the Foreign Investment Agency at the Ministry of Industry and Trade, as at the end of 2016, Japanese investors had registered to invest in 53 projects with total capital of $1.91 billion; the most of any country. Shaking hands Japanese investors conducted many merger and acquisition (M&A) deals in Vietnam during the first half of this year, according to JLL.  They were initially involved in investing in office blocks and hotels but are now stepping into the residential sector. Different from other investors, however, Japanese enterprises do not invest in projects. They choose instead to invest indirectly, purchasing shares from companies or joining a project that has already completed formalities with government agencies. The Nam Long Investment Co., has boosted its cooperation with Japanese enterprises. It recently reached agreement with two Japanese investors - Hankyu Realty from Osaka and Nishi Nippon Railroad from Fukuoka - to launch the Mizuki Park project in District 7, Ho Chi Minh City with investment capital of VND8 trillion ($352 million).  Other cooperative arrangements between Japanese and Vietnamese enterprises have also been seen, such as Daiwa House, Nomura, and Sumitomo cooperating with Phu My Hung and Sanyo Home with the Tien Phat Company to implement the Ascent Lakeside project in District 7. Kajima has worked with Indochina Capital, Mitsubishi with the Bitexco Group, and Tokyu with Becamex, while the Creed Group has poured…... [read more]

According to experts, the estimated $3 billion spent by Vietnamese people to purchase US residential property could have been transferred largely through illegitimate ways. The “Profile of International Activity in US Residential Real Estate” report by the US National Association of Realtors (NAR) showed that between April 2016 and March 2017, Vietnamese people spent up to $3 billion buying residential property in the US. Currently, money for buying real estate cannot be transferred through normal banking channels, which begs the question: how did these Vietnamese buyers transfer money abroad to buy real estate? According to Vietnam’s Law on Foreign Exchange Management of 2005 (amended in 2013), Vietnamese people can only transfer money overseas under prescribed circumstances, such as carrying a maximum of $5,000 or equivalent when going through border checkpoints. Additionally, Vietnamese people can transfer money overseas through banking, to pay for tuition or medical expenses, though the amount is usually quite small. It is estimated that Vietnamese people spent up to $3 billion on buying residential property in the US Nguyen Hung, CEO of TPBank, was quoted as saying on vnexpress.net that money transferred overseas to purchase property may go through illegitimate channels, as banks only accept legal transactions and the amount is not so large usually . “Maybe they transferred money through other means and not through banks. The State Bank of Vietnam will surely make moves to control…... [read more]

A market report for the first half of the year noted that there are signs of oversupply in the condotel, officetel and serviced apartment market segment. Condotels now account for 56% of total supply, higher than the supply of hotels and resorts, which just account for 44%. This is considered abnormal because in principle the supply of condotels is usually lower than resorts and hotels. Until 2014, the supply of condotel had been modest. They were developed by a small number of investors at resort complexes in Phan Thiet, Nha Trang and Da Nang.  According to DKRA, a real estate developer, in 2016 alone, 26 new condotel projects were put into operation which provided 15,000 apartments. The supply sources were mostly in six coastal provinces and cities: Nha Trang, Da Nang, Phu Quoc, Quy Nhon, Binh Thuan and Ba Ria – Vung Tau.  In the first quarter of 2017, three more condotel projects opened, while existing projects started the next development stage. The projects provided about 1,000 products, mostly in Da Nang, Ba Ria – Vung Tau and Binh Thuan. In early May, Savills Vietnam, a real estate service provider, predicted the resort real estate market would continue developing strongly as there is a supply wave of ‘second homes’. In addition to Khanh Hoa, Da Nang and Phu Quoc, the supply could be from Ho Tram, Ha Long and Quang Nam. The projects in the localities are expected to…... [read more]

Boosting exports, reducing import surplus In the first quarter of this year, Vietnam’s exports generated US$8.57 billion, a year-on-year increase of 20 percent. Notably, exports in January and March fetched more than US$3 billion each. This means despite legal complications, exports have maintained high growth, and the export target of earning US$36 billion in 2006 is likely to be achieved. Meanwhile, Vietnam imported US$8.513 billion worth of goods in the reviewed period, creating an export surplus of more than US$50 million. That was good news for the national economy as since 1993 Vietnam has posted increasing import surplus, totalling US$5 billion in the past three years. The export surplus in the first quarter of 2006 was attributed to measures to boost exports alongside control of imports, particularly in the State business sector. Statistics show that the State business sector generated an import surplus of US$870 million in the first quarter of 2003, US$1.6 billion in the corresponding period of 2004 and US$2.36 billion in the same period of 2005. However, this figure fell to US$1.75 billion in the first quarter of 2006. Market forces also played a very important role in import surplus fall. In the first three months of 2006, the import of complete knocked-down (CKD) motorcycle and car units, fertilisers, steel and steel ingots, and petrol dropped dramatically. The import of CKD motorcycles and cars and their accessories alone fell by 50 percent. This means that the domestic market is playing the greater role in regulating quantity and…... [read more]

Many major real estate entrepreneurs from the US, the Republic of Korea, Australia, China and Singapore have come to Vietnam to explore its real estate market. Atimol Group of Russia has officially announced a strategy for business operations in Vietnam after opening its office in Hanoi in November this year. Earlier, a host of the world’s largest companies such as France Telecom, Avaya, Comvik, Sun Microsystems and particularly the International Fund Vina Capital have also shown keen interest in the market. A series of real estate business projects invested by the Republic of Korea (RoK), including Boo Young (US$170 million), Lee & Co ( US$70 million) and Posco-Vinaconex (US$2 billion) are being considered for licensing while other foreign investors such as GuocoLand and CapitalLand are continuing to seek new investment projects in Vietnam. In addition, Happiness Square project (Taiwan) worth US$150 million and SaigonPortCity project (Singapore) are underway in HCMCity. After a time of abating, the real estate market has gained momentum as domestic investors are calling on foreign partners to pour investment into nearly 100 real estate projects. Director of the International Investment and Urban Development Company ( IDJ) Tran Trong Hieu says after Vietnam’s successful organisation of the 14th Economic Leaders’ Meeting and entry into the WTO, IDJ has received more than 15 entrepreneur delegations wanting to learn about the investment environment in the country. Some 70 percent of 69 projects in need of investment capital are involved in real estate business. Director General of Real Estate Business…... [read more]

Vietnam’s recent admission to the World Trade Organisation has created a boom in the banking system. Many entities have registered for banking services. However, the Government is considering these applications cautiously. Dr. Tran Dinh Thien, deputy head of the Central Institute for Economic Management, says that the operations of the stock market several years ago have changed the degree of risk to the financial and banking system in Vietnam. Worthy of note is that this system has not experienced or run any risks from the stock market. Therefore, Mr Thien says Vietnam needs an overall and comprehensive study of the system for a correct assessment of the risks. “While drafting the 2011-2020 socio-economic development strategy, we propose priority be given to the financial security system. This issue should be taken into account, given the impacts of the 1997 Asian financial crisis and recent fluctuations on the stock market,” says Mr Thien. Stock, banking and financial markets are said to have the highest levels of development. However, their development relies on secondary markets such as the real estate and labour markets. Therefore, such an unstable and fledgling real estate market could pose a real risk to the financial and banking market in Vietnam. In addition, the establishment of new banks in the country at present is contrary to market rules. Normally, the stock market is established after the banking system develops to a certain level, but the trend in Vietnam has been in the reverse order. Enterprises that are very important…... [read more]




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