Hanoi’s condo market attracts flow of foreign capital

The ZEN Residence in Hanoi’s Hoang Mai district is grabbing particular attention from foreign investors

The latest report by CBRE, a leading real estate advisory firm, showed that a total of 8,800 new condos were put on sale in Hanoi’s realty market over the first quarter this year, 6,600 units of which have already found buyers.

CBRE also forecasted a 9-per cent jump in the volume of condos sold this year compared to 2017, reaching 28,000 units.

The plentiful supply aims to keep up with current burgeoning market demand, particularly from the soaring number of city dwellers, most of whom are young people.

In addition, young people in big cities like Hanoi often consider buying their own houses with their work savings or after getting married, leading to rising housing demand.

Favoured options are apartment units rather than landed properties due to both financial and comfort factors. That is because many developers are trying their best to provide prospective buyers with the utmost comfort by launching fully-furnished apartment building projects which feature a diverse range of accompanying facilities.

This helps young professionals relax amongst the hustle and bustle of the city with available convenient facilities. In addition, landed properties often carry a more costly price tag compared to apartment units, putting financial pressure on young buyers.

What is more, there is a surging growth in the middle-class population of Hanoi, which is set to continue rising amid the country’s rapid economic development. In combination with burgeoning demand for condos, buying prices and rental costs are expected to rise as well.

The value of property chiefly depends on key factors such as transport convenience, geographical position, and accompanying amenities. The investment opportunities at projects which satisfy these factors, therefore, are very appealing to foreign investors, particularly considering the record-high property prices in many foreign markets in the region.

Well aware of the trend, Terence Chan, director of Golden Emperor, one of Hong Kong’s leading outbound real estate firms, said that large-scale infrastructure projects and strong foreign capital flow are among the factors that have led to the booming economic development in Hanoi and stimulated the real estate market. In the condo sector, Gamuda Land with its award-winning condo project – the ZEN Residence (Gamuda Gardens in Hanoi’s Hoang Mai district) – holds distinct advantages complemented by a smart infrastructure system that connects with major roads.

“By virtue of a well-conceived development plan, the ZEN Residence will grow into a charming residential community, promising to deliver foreign investors a high leasing profit rate at about 7 per cent per annum,” Chan said.

Looking back on 2017 and the first half of 2018, Hanoi’s condo market has attracted many foreign investors after they have penetrated the Vietnamese market.

At present, foreign investors from Singapore, Hong Kong, Japan, and South Korea have reported a rapidly growing presence in the Vietnamese real estate market, whereas previously, their attention was mainly confined to simply seeking investment opportunities. Besides, their investments have also expanded outside of the commercial real estate sector into the private housing segment.