05/05/2016
VIETNAMESE HOUSING ATTRACTS MORE ELDERLY FOREIGNER
According to CEO of CBRE Vietnam, elder foreign investors have shown more interest in residential developments in the Southeast Asia country.
At a client conference held at Lotte Hotel Hanoi yesterday, Marc Townsend – CBRE Vietnam’s CEO said that the proportion of foreign buyers in the apartment segment has risen to 13% this year from 0% in 2015. Notably, the majority of them are 50 years old and over, from South Korea, Japan, Taiwan, Singapore, Malaysia and some European countries.
CBRE’s report revealed one of the reasons for this sudden surge in foreign home buyers is that the value and pricing of Vietnamese real esate products are appreciating faster than their peers in regional cities like Bangkok or Singapore.
Accordingly, in the central business districts, luxury apartments are priced at $4,000-7,500 per sq.m in Ho Chi Minh City and at $2,000-5,000 per sq. m in Hanoi. In the meanwhile, their peers in Bangkok are priced at $7,500 -10,000 per sq.m but still lower than the $17,500-26,000 per sq.m offered in Singapore.
Townsend said: “Over-50 people like me are still the biggest customers because they either wish for a long-term residence in Vietnam or because they have a business here. In addition, they may think everything is cheaper compared to their homeland or they feel like the climate here is better.”
Although Vietnamese government has allowed to sell apartments to foreigners since July 1, 2015, offshore buyers still have to face some difficulties that can make them hesitate to bu. For example, the lack of property title insurance and the limited length of ownership are considered the most popular concerns.
However, because the majority of home buyers are over 50 years old, the CEO believed that these issues would not have a significant effect on their intention to buy home in Vietnam.
He said: “Every investor has a different perspective. When you are 50 and over, you have more money and a high level of acceptance of the law. So, you will not need neither an insurance nor a bank loan. In addition, the 50-year limit on ownership is no longer a problem like when you are 20.”
Townsend also added that the map of who is buying, why they are buying and what they are going to do with the real estate is beginning to change. Newcomers to the local market have to spend a lot of time to get comfortable with the law and the investment climate. Should they cannot adapt, they will not buy anything at all.
