Thanks to the new law on real estate business on July 1 that took effect, now foreigners, as well as Vietnamese overseas, can conveniently buy, own, and invest in real estate business in Vietnam which is expected to thrive in the market soon. With high-class apartments in Ho Chi Minh City or Hanoi, the average price is 3 to 4 times lower than in some other cities in the region such as Bangkok, Jakarta, or Manila.
When responding in the press, a representative of the Committee on Vietnamese overseas said that there are many Vietnamese people living abroad who are happy to know that this regulation takes effect, because now they can buy a house under their name, meaning complete property ownership.
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Instead of renting houses, now foreigners can buy and possess their own property, and even buy to invest in the business. Will house prices in Vietnam be attractive enough to this group of potential customers? That is the concern many real estate businesses have.
The fact that whether Vietnam’s house price is expensive or cheap has brought huge debate in recent forums, and gained the attention of many experts and public opinion.
A real estate company in Ho Chi Minh City once had an insightful study and assessment of apartment prices in Ho Chi Minh City compared to other cities around the region. In particular, this business pointed out that affordable apartments in Ho Chi Minh City range from 30,000-40,000 USD (equivalent to 650-850 million VND). Meanwhile, similar house prices in urban areas of the same size as Ho Chi Minh City such as Bangkok, Hong Kong, or Manila… are way higher at about $300,000 each.
In the media, this business representative also stated that “Vietnam’s house prices are the cheapest in the world”. In a recent conference on real estate investment opportunities in Ho Chi Minh City, Mr. Nguyen Nam Son – CEO of Vietnam Capital Partners Ltd. made an interesting comparison about the prices of various types of Real Estate in Ho Chi Minh City with other cities with similar population sizes.
Whereas, most of the real estates inside Ho Chi Minh city have more ideal costs compared to other cities such as Bangkok, Manila and Jakarta.
According to CBRE, an international consulting company specializing in research on real estate markets worldwide, examines that the average price of a luxury apartment in Ho Chi Minh City is about $1,781/m2, or about $178,000 per apartment of approx. 100m2. However, similar apartments in Singapore, Shanghai, Malaysia will cost about 500,000 – 600,000 USD, which is 3-4 times higher.
Apparently, the matter of whether the price of houses in Vietnam is expensive or cheap has been really controversy. Some believe that the house price in Vietnam is “the cheapest in the world” while other people argue that it is too pricey. With a relative concept between the sense of expensiveness or cheapness, to compare a certain item is truly bias, especially when it comes to high immobility in real estate.
Regardless, through the studies of the mentioned organizations, it is clear that Vietnam’s house prices are much lower than that of some countries in the region. Whether the price of real estate in that country is high or low still needs to be taken into account of some factors such as income level, economic conditions, market…
Despite that, this does not mean real estate prices are incomparable. A common method that many countries use to compare house prices is to compare the average house price with the average income of people.
Savills’ survey indicates the complexity of the Vietnamese market, not to mention the matter of the price. Yet Mr. Troy Griffiths, CEO of Savills VN, believed house prices in Vietnam are quite low.
It is difficult to say whether Vietnamese real estate is cheap or expensive, nevertheless, according to many experts, Vietnam’s real estate market is only in its infancy, there is still a lot of potential for development. Thereby, real estate prices are also brought lots of attention by the investors.
As Mr. Peter Ryder, CEO of Indochina Capital once said that the potential for high-end real estate in Vietnam is still very large, he assessed that this market opened to the rich will be very lucrative when Vietnam gradually narrows the gap with the world, especially when Vietnam opens its door to foreigners to buy houses. Mr. Peter Ryder cited that a high-class apartment of the same quality in Vietnam is only about 2,800-3,000 USD/m2, but in some other cities in the region it can be up to 20,000 USD/m2.
(Source: thongtinchungcu.com.vn)