Ho Chi Minh

Ho Chi Minh City, as the largest population centre in Vietnam, is the bustling, dynamic and industrious heart of the Southeast Asian nation and its undisputed economic capital. The laws pertaining to foreign ownership of land in Vietnam is currently under review by the country’s government.

An example of what may be to come was seen in a pilot project that saw some 21,000 foreigners who had been living in Vietnam for some time qualify to purchase a house in the country. However, the rules of the scheme are relatively restrictive, under which foreigners are only permitted to buy one house. Foreigners and foreign organisations can also only own houses for up to 50 years (depending on the duration of their projects in Vietnam) which can then be extended.

However, foreigners have been buying into apartments in HCMC for some time and at an astonishing rate. Around 85 per cent of foreign direct investment (FDI) that found its way into the city during 2007 flowing directly into the property sector. HCMC attracted US$2.5 billion during that period with over US$2.1 billion going into real estate (mainly office and condominium developments).

Buying Property in Ho Chi Minh City
In 2007 the estimated capital injection into the Vietnamese property market reached US$5bn, mainly foreign direct investment (FDI). Many districts within HCMC saw land prices increase 70-200 per cent. Property in HCMC was equally buoyant with average prices more than tripling from 2006 to 2007; and the luxury sector was been a key growth area. However, the beginning of 2008 marked a slowdown in what many had considered to be unsustainable growth. Higher construction costs due to global oil price hikes and resultant construction material costs, coupled with the governments tight monetary policies aimed at curbing inflation hit hard and transactions plummeted. However, the city’s fundamentals remained strong and demand high, particularly among HCMC’s rapidly expanding middle-class; many of whom had been holding off stepping into the market while prices were so inflated by speculators. More on buying property in Ho Chi Minh City.

Condos in Ho Chi Minh City
Back in 2005 developers rushed to get as many condominium units onto the red hot HCMC market as possible, and output reached mammoth proportions. Attractive, low-priced condos within a housing program launched by a group of two local property developers supplied 30,000 condos during the year. The rapid uptake was fuelled by support from local banks and it proved a big boost to the local property market which had been enduring a comparatively stagnant period. 36-square-meter condos were going for around 175 to 190 million VND ($11,000 to $12,000) and were snapped up, largely by speculators. More on buying condos in Ho Chi Minh City.

Houses and land in Ho Chi Minh City
Over the past two years many Vietnamese property investors have bought up swathes of land in HCMC, often at artificially inflated prices, in the hope that land ownership would be opened up to foreigners and that they could then sell on to non-nationals at huge profits. However, while it is still possible that the law might be changed so that foreigners can own land on which to build houses at some time over the coming years, it seems somewhat unlikely to come about any time soon given the fact that the government has only just visited the issue of foreign ownership.
More on buying houses and land in Ho Chi Minh City.

Renovating in Ho Chi Minh City property
According to the authorities Ho Chi Minh City has 152 apartment buildings, occupied by 12,608 inhabitants which are dilapidated. According to a survey by the city’s Department of Construction structures contain a total living space of 618,202 sqm. Among them, 67 buildings are categorised as seriously decayed requiring urgent repair. Beyond the city limits at least 60 per cent of the countrys three million square meters of antiquated apartments most of which were constructed before 1991 are in need of repair, according to the ministrys latest statistics. So there is no shortage of projects for those looking to involve themselves in a restoration project.

However, it has not proved to be a particularly attractive option for developers thus far, with major players in the real estate market appearing disinclined to renovate run-down apartment blocks as a means of generating profit due to a variety of bureaucratic obstacles. However, the government is aiming to take on the bulk of these projects itself, and announced a nation-wide project which aimed to fix all run-down apartments by 2015. It demanded progress reports be submitted by the various provinces, outlining what was planned for the dilapidated buildings in their areas in order to comply with the 2015 deadline.

With foreigners currently not allowed to buy property, restoration projects are somewhat beyond their reach. However, with the planned relaxation of ownership laws due to come into force at the start of 2009, opportunities may open up. As with elsewhere, any venture of this type should begin with a structural survey report from an experienced property assessor/surveyor to ensure there are no hidden problems with the building. Two key issues with run down buildings in the city is that most apartments of this vintage, usually ranging from four- to five-stories high, do not include elevators or possess standardised fire protective systems.

Top tips for Ho Chi Minh City property
Ho Chi Minh City Property buyers guide
Guide to buying condos in Ho Chi Minh City
Guide to buying houses and land in Ho Chi Minh City