Hanoi’s lucrative property market attracts foreigners

Hanoi expects to attract more foreign buyers on its real estate market as a rising number of foreign experts and entrepreneurs are working in the capital city.-VNS Photo Thanh Hai

Statistics show that more than 82,000 foreigners live and work in Vietnam, and a large number of them are in Hanoi from South Korea, China, Singapore, Russia and the US, reported the Vietnam News Agency.

According to a report by HSBC Vietnam, 29 per cent of foreign experts working in the country said they were ready to spend their savings on home purchases, including high-end apartments and luxury property.

The revised law on housing, which took effect in 2015, has created more favourable conditions for foreigners to buy houses in Vietnam. More open policies to attract foreign investment have also enhanced the attractiveness of Hanoi’s real estate.

Experts said granting permission for foreigners to purchase housing is expected to encourage more types of real estate like investment, tourism and service property, which will benefit the economy.

The western and northern areas of Hanoi are attracting foreign buyers, according to experts. Notably, more and more customers from the Republic of Korea, Japan, Malaysia and Singapore are seeking to buy or rent high-end apartments in the west of the city.

Nguyen Phuc Thanh, an experienced investor, explained that the western side accommodates the headquarters of many ministries, sectors and major domestic and foreign businesses. It is also home to key facilities such as the Vietnam National Convention Centre and the National Sports Complex.

Additionally, transport infrastructure in the area is relatively modern and convenient for accessing inner areas and main roads to other provinces and cities, he said.

The insiders also said the western area, including the My Dinh area, will remain a top destination for foreigners. More importantly, these clients have high requirements for property products, especially accompanying services, which means the foreign influx is a boon for investors in high-end projects.

Nguyen Bich Trang, former director of CBRE Hanoi, said the north of Hanoi, even on the other end of the Nhat Tan Bridge, is developing strongly. In the next five to seven years, new residential areas will be built here and change the city’s real estate market, particularly the mid-range and high-end segments.

The higher development potential of high-end property in the north, compared to other areas, is thanks to certain geographical advantages, she said.

Echoing that view, Le Manh Cuong, a division head at the municipal Department of Planning and Architecture, said location is key for property value. Most big cities in the world also expand towards rivers or airports, and very few have developed away from them.

This is why residential projects in the south of Hanoi like Hoa Lac or Xuan Mai were not as successful as expected. Meanwhile, although many projects in the north, particularly on the other side of the Red River, are just in the planning stage, they have attracted attention from foreign investors and clients, he said.

Chairman of Ciputra Group Budiarsa Sastrawinata said Hanoi is a potential market for big projects, especially complexes with a diverse range of property products.

Deputy Minister of Construction Nguyen Van Sinh said Hanoi needs to identify the core issues to solve difficulties on the property market. The city should adjust the structure of property products according to real demand and also continue to have preferential conditions for enterprises, including domestic and foreign firms. Those would encourage the sustainable development of the real estate market.

A recent major investment is a smart city project in Hai Boi and Vinh Ngoc communes of Dong Anh District, Hanoi. Implemented by a Japanese firm and a Vietnamese partner, it has total investment of more than US$4.1 billion and is set to begin construction this October. It is one of the biggest foreign-invested projects in Hanoi in the first half of 2018.

According to the Ministry of Planning and Investment, foreign investors poured $5.9 billion into Vietnamese real estate between January and August, accounting for 24.2 per cent of total registered foreign capital. That gave property second place among the 17 sectors receiving foreign investment during the period.