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Buying a Property in Vietnam

Property in Vietnam: Investment potential

Vietnam has developed its economy hugely in the past few years and as a result, current levels of inflation are high. Any country in the world would have an issue with 25 per cent inflation, but the government is taking the right steps to combat this in raising interest rates. However, as an emerging market, there are bound to be some bumpier periods in the economic development. The current expert predictions for the economy in Vietnam are for a brief period of consolidation preceding further, steadier growth in the future.

Vietnam has many of the attributes to make it an interesting investment opportunity. The cities are investing heavily in improved infrastructure, with bridges, tunnels, metro systems and improved airport access; the opening of many markets to foreign investment has led to huge interest in the retail, banking, leisure, hotel and real estate industries; and the changes in employment legislation mean that multinational companies can employ as many expat workers as they need to.

The cities are not just attracting business interest. Young Vietnamese people are attracted by the higher wages and career opportunities, and with some 65 per cent of the country’s population under the age of 35 there is huge scope and earning potential in the population. The lack of new condo units coming on to the market in the next few years is going to lead to high rental yields and high demand for leaseholds in coming years.

Away from the cities, golf in Vietnam is currently attracting as much tourist attention as the beaches. Hotel resorts are now combining the beach, golf and spa facilities they can offer. Since the successful first experiment in this field in the country, many more of these combined resorts have opened.

Healthcare

While there are a number of fine and well-respected medical institutions in Vietnam, primarily in Hanoi and Ho Chi Minh City, healthcare is one of the areas in which Vietnam lags behind the rest of the modern world. This is doubtless going to improve as economic development continues, but for the time being, visitors and residents are advised to have some kind of private health cover organised. This does not have to be an expensive solution, and many health insurers offer packages that will cover you anywhere in the world.

That said, the general standard of care in Vietnam’s hospitals and clinics is high, even if it is not available to the whole population. Unless major treatment is required, sticking with healthcare professionals in the major cities is fine.

Transport

Roads are still developing in Vietnam, and in cities the traffic congestion can sometimes be unbearable. As yet, there has been little effort to separate out road users into more appropriate groups and segregations. The concept of expressways or motorways is yet to make much impact. Many of the problems come from the fact that roads are funded and managed on different levels – national roads are run by the government, regional roads by the individual provinces and local roads are paid for by the individual towns and communes.

The main rail line is a single line north-south route along the length of the country, though only the brave tackle the 30-40 hour journey from Hanoi to Ho Chi Minh City. Like the road system, rail is an area that will require some huge funding and organizational changes in order to bring it up to the standards required by a modern economy.

And finally...

Vietnam is one of the more challenging of the emerging property markets in the world – there are no astronomical price rises going on at the moment, and the economy is in a phase of reassessment with inflation and interest rate pressures. At the same time, there is a huge amount of potential in the country. The population is young and keen to work, foreign investment is being welcomed and beginning to have a real impact, and there will be a shortage of properties both for rental and to buy in years to come.

The market is also not open to everyone, so if you are in one of the groups of people who qualify to buy property in Vietnam when the law changes on 1st January 2009, you could be in a strong position to take advantage of the market and economic development.

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More pages

Page 1: Why buy property in Vietnam?
Page 2: The process of buying property in Vietnam
Page 3: Property in Vietnam: Investment potential

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