Property Market Overview

The Socialist Republic of Vietnam has been busily dumping its insular communist past and while democracy might still be yet to take hold, the country's government has embraced capitalism with a vengeance. The speed with which capitalism has reciprocated has led to an explosion in tourists and a rapid increase in the number of overseas investors taking up residence along its stunning shores and in its fascinating cities.

Those who have opted to put their faith, and their money, into the region's most famous nation have been rewarded with exceptional returns with many settling on selling prices that are a multiple of their original investment. However, the secret is out and the success enjoyed by investors has meant they have been coming thick and fast in recent years. And its not just Vietnam's enviable beaches, top notch food and entertainment options, beautiful countryside and fascinating history that have been driving investors into the arms of its burgeoning band of property developers – the country has been the main recipient of China's drive to encourage its businessmen to invest outside their home nation. But although Vietnam's property genie is very much out of the bottle, the country still has all the raw ingredients to make it a great place to live and most importantly, returns are still outstripping investments. Vietnam's great weather, fine food and world-renowned beaches means it continues to enter the sights of property investors looking for new opportunities away from the traditional European and Caribbean markets.

Major property investment regions
Hanoi, Ho Chi Minh City

Upcoming markets
Phu Quoc, Hoi An

HANOI
Vietnam's capital city Hanoi has a rapidly-growing population that is currently approaching 3.5 million – and things are getting a little cramped. As a result of the white-hot economy and property supply consistently falling short of demand, competition for residential and office space is fierce, and both rental rates and unit purchase prices are sky-rocketing.Read the latest analysis of the Hanoi property market

HO CHI MINH CITY
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.Read our knowledgebase section on Ho Chi Minh City Property

PHU QUOC
Phu Quoc is a large up-and-coming holiday island in the Gulf of Thailand which falls under Vietnamese administration. Phu Quoc, in Kien Giang Province, is the largest island in Vietnam covering an area of 56 sq. km. In the early 17th century, Phu Quoc was a desolate area, where Vietnamese and Chinese immigrants earned their living from sea cucumbers. It served as a French colonial rubber and coconut plantation and later as P.O.W detention camp of 40,000 inmates during the country's long war. Now however, with its UNESCO biosphere nature reserve occupying nearly 70 per cent of the island, average annual temperatures of 27 degrees, and range of virtually untouched beaches, Phu Quoc is reinventing itself as a tourism hub which, the government hopes, can eventually rival luminaries such as Phuket, Bali and Koh Samui. Read our knowledgebase section on Phu Quoc Property

HOI AN
Hoi An is home to the largest harbour in Southeast Asia. The area has grown to become a hugely popular tourist destination and is enjoying climbing land and development prices thanks to ever-increasing visitor numbers. Its key areas of interest are the old town that runs in part along the De Vong river and the exceptional Cua Dai Beach. Another part of the city which is proving popular of late is Cam An, where property prices are climbing as high as US$448 per square metre; nearly 10 times the price of less than a decade ago. Its closest neighbouring city is Danang, which is some 35 km away. Hoi An is also served by Danang airport which is 40km from the centre of Hoi An.Read the latest analysis of the Hoi An property market

PATTAYA
Pattaya, located on the east coast of the Gulf of Thailand, is certainly the jewel in Thailand's eastern development crown, but it's by no means the only diamond in the rough. Developments in locales surrounding Pattaya such as Jomtien, Sahathip, Pratumnak Hill and Mabrachan Lake are providing good investment opportunities. And with the new international airport - Suvarnabhumi - just an hour away, one could say that the sky is the limit for the sheer size and scale of future Pattaya property developments, and the international agents that wheel and deal them.

Spotlighted in countless local and international publications, the potential for property investment on the eastern seaboard is attracting an increasing amount of attention. With the bursting of Thailand's property bubble in 1997, the market was pretty cool for several years thereafter, but the past half-decade has seen some tremendous growth potential. Read the latest analysis of the Pattaya property market

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Essential information

Location
Vietnam is located in Southeast Asia and borders China, Laos and Cambodia. Its coasts face into the Gulf of Thailand the Gulf of Tonkin, and the South China Sea.

Area
Total: 329,560 sq km
Land: 325,360 sq km
Water: 4,200 sq km

Population
85,262,356 million(July 2007)

Language
Vietnamese is the country's official first language and English is increasingly seen as second with French coming in third. Chinese, and Khmer are also spoken by sections of the population, primarily among minority groups.

Religion
None 80.8 per cent, Buddhist 9.3 per cent, Catholic 6.7 per cent, Hoa Hao 1.5 per cent, Cao Dai 1.1 per cent, Protestant 0.5 per cent and Muslim 0.1 per cent.

Currency/Money
The currency in Vietnam is the Dong (VND). Major credit cards are widely accepted and traveller's cheques are still accepted in banks, large hotels, and shops.

Climate
The country's climate is split between the largely tropical south and the monsoonal north, which endures a hot rainy season from May to September and a warm, dry season from October to March.

International dialling code
+84

Capital
Hanoi

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History

From the 11th to the 18th centuries Vietnam was a largely feudal society governed by a series of Dynasties. The L? Dynasty of the 15th century was among its most successful and a series of expansionist drives southward, frequently into the Kingdom of Champa and areas previously occupied by the rapidly-declining Khmer empire, led to significant territorial gains.

Vietnam fell under French rule in 1884 after a 26-year campaign was absorbed into French Indochina. The nation declared independence at the close of World War II, triggering a guerilla conflict between communist forces led by Ho Chi Minh and the former colonial power. By 1954 the French were defeated and the Geneva Accords of the same year followed the Korean example and divided the country into the Soviet-backed communist north and US-bolstered anti-communist south. The US met the expansionist tendencies of the north with economic and military aid and by the 1960s US soldiers were clashing directly with Ho Chi Minh's southern-based National Front for the Liberation of South Vietnam (NLF) rebels. North Vietnamese forces intervened in 1968 during the Tet Offensive and the conflict began to spread to Laos and Cambodia, both of which were bombed by the US.

With spiralling casualties the US began handing over operations to the South Vietnamese army by and 1973 the last of the US combat troops withdrew. Two years later the North Vietnamese forces again moved south, this time successfully. Saigon fell in April 1975 and a year later the country was re-united under communist rule. All opposition was quickly wiped away and dissidents were sent to the infamous 're-education' camps. Thousands fled the country while the government initiated a programme of collectivisation of land and factories.

In the decades after the war the Vietnamese government struggled to rebuild its shattered country and progress was held back by further conflicts; first against Cambodia's genocidal Khmer Rouge and later, in 1979, with China.

A turning point in the country's fortunes came in 1986 when the Communist Party of Vietnam opened up to private ownership and began encouraging foreign investment. Thee consequences of the policy shift is still being felt today and while political reform is still a long way off, Vietnam's economy is one of the world's fastest growing.

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Government

Vietnam is a single-party state and all branches of government and politics fall under the direct control of the Communist Party. Organisations not established under the auspices of the party are barred from contesting elections.

However, while the party still defines itself as communist, it has, like China, been embracing capitalism for some time. The President of Vietnam acts as both the head of state and commander in chief of the country's military although power resides moreso with Vietnam's Prime Minister, a position currently held by Nguyen Tan Dung.

Dung presides over a council of ministers which is drawn from the country's 498-man legislature, the National Assembly.

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Economy

Vietnam's economy, as it stands, began to take shape in 1986 when a range of reforms aimed at overhauling the protectionist, anti-private industry policies that had seen the country fall behind its neighbours, were introduced. However, once the free market economic reforms were introduced and private industry began to develop, results came quickly.

By 1990 the country's GDP hit 8 per cent, a rate it maintained for an impressive seven years. Massive foreign investment meant GDP expansion has remained strong since, hovering around 7 per cent since 2000, and Vietnam is currently the second fasted growing economy in the world.

However, despite it's massive economic growth, the majority of Vietnam's people live in relative poverty. However, the number of people living in extreme poverty has reduced significantly in recent years and the proportion of the population with an income of less than a dollar a day has fallen well below that of countries such as India and the Philippines.

While manufacturing and hi-tech industries have taken off in recent years – boosted my massive foreign investment coming in particular from China – much of Vietnam's population relies on agriculture. Its other main trading partners include Japan, The U.S., the EU the Asean nations and Australia.

It is the world's second biggest rice producer behind Thailand and the biggest producer of cashew nuts. Unemployment in Vietnam, which has one of the most open economies in the world, sits at just 5.4 per cent as of 2007. Vietnam was accepted into the World Trade Organisation (WTO) in 2006.

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Visas

Only citizens of certain countries can visit Vietnam without an entry visa. Those countries include Asean countries, Korea, Japan and Scandinavian nations. All other citizens are required to get an entry visa before departure or a pre-approved entry visa (visa is issued on arrival at Vietnam’s International Airports) supplied before arrival in Vietnam.

Citizens of countries which do not have a Vietnam embassy or consulate, along with visitors who wish to visit Vietnam as part of a multi-destination trip, can apply for a 'Visa on Arrival' which involves receiving an entry visa at a Vietnamese immigration checkpoint. Foreigners who opt for this route must first get an approval letter, normally via a private Vietnam-based travel agency, which is issued by the Vietnam Immigration Department in Hanoi. Persons attempting to enter Vietnam without a valid visa or an approval letter are generally sent back to their last port of departure by Vietnamese authorities. As always, visitors planning a trip to Vietnam should review all visa conditions and carefully note any conditions listed on the immigration stamp which you will receive on arrival.

As of May 2008 some Vietnamese Embassies have been offering a 'while you wait' service whereby a single entry visa can be gained in 15 minutes at a cost of US$92. A valid passport, passport photo and cash payment is required. Though valid for thirty days, visas can be extended once inside Vietnam. Fees vary from embassy to embassy; about $50 in Bangkok and $85 in Washington, for example. A double entry visa is also available for tourists making side trips from Vietnam to destinations in Thailand, Cambodia and Laos.

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Healthcare

Vietnam is a relative novice on the medical tourism scene and is a considerable way behind the likes of Thailand, largely due to a shortage of English-speaking medical professionals. However, it is slowly building its reputation as an alternative medical tourism destination.

The country now boasts a number of facilities catering specifically to foreigners which offer a broad selection of surgical procedures, and medical tourist figures are on the increase.

No vaccinations are officially required to visit Vietnam. However it is prudent to have up-to-date inoculations for Polio, Meningitis, Hepatitis A&B, Tuberculosis, TABT (TYPHOID, paratyphoid A&B and tetanus), Cholera, Malaria, and Japanese Encephalitis.

Authorities remain concerned about the spread of avian influenza and some travellers, up until relatively recently, have been required to undergo temperature screening on arrival in Hanoi or Ho Chi Minh City.

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Travel

Vietnam has international airports at Hanoi, Ho Chi Minh City and Da Nang. Direct flights are available from the US, Qatar, Macau, Indonesia, Taiwan, Thailand, South Korea, Brunei, Singapore, Russia, The Philippines, New Zealand, Malaysia, Australia, Cambodia, China, France, Germany, Hong Kong, Japan and Laos. Non-stop long-distance flights are limited and most arrivals are via Bangkok, Taipei, Hong Kong or Singapore.

Vietnam is well served by internal flights with Vietnam Airlines and Jetstar Pacific the two main airlines. The trip from Hanoi to HCMC takes about two hours. All major cities in Vietnam are connected by bus although traveling by this means can be time-consuming and uncomfortable given the geography of the country. However, Vietnam has a comparatively well-established rail network which connects several major cities.

The car rental option is all but non-existent in Vietnam and international driving licenses are not accepted. The idea of renting cars to drive yourself is alien in Vietnam and when you do rent a car the assumption will be that you also hire a driver.

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