Elderly foreigners keen on Vietnamese housing

At CBRE’s client conference held at Lotte Hotel Hanoi on April 7, managing director Marc Townsend revealed that the proportion of offshore buyers in the condominium sector has increased from zero per cent last year to 13 per cent this year, with the majority being 50 years old and over. They include Korean, Japanese, Taiwanese, Singaporean, Malaysian, and a few European buyers.

One of the reasons for the sudden surge in offshore buyers is that the pricing and value of Vietnamese property is appreciating faster than their peers in Singapore or Bangkok.

According to CBRE’s report, luxury condominiums in the central business districts are priced at $2000-5000 per square metre in Hanoi and at $4000-7500 per square metre in Ho Chi Minh City. Meanwhile, the price for one square metre in Bangkok is between $7,500 and $10,000, still lower than the $17,500-26,000 offered in Singapore.

“Over-50 people, like me, are still the biggest buyers. This is because they either wish for a long term residence in Vietnam, possibly due to having a Vietnamese spouse, or because they have a business here, or they think everything is cheaper compared to where they live, or they feel like the climate is better than back home,” said Townsend.

Though the Vietnamese government has authorised selling houses to foreigners since July last year, there are still difficulties that make foreigners hesitate to buy, such as the lack of property title insurance or the limited length of ownership.

However, Marc believed that these problems would not have a significant effect on the intention to buy because the majority of buyers are over 50.

“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. Therefore, you will not need neither an insurance nor a bank loan,” he said. “Moreover, when you are 50, the 50-year-limit is not a problem like if you are 20.”

“The map of who is buying, why they are buying, and what they are going to do with the property is beginning to change. It will take newcomers to the market a lot of time to get comfortable with the law and the investment climate. If they cannot adapt then they will not buy anything at all and move on,” he added.