Vietnam has for the first time been named a “semi-transparent” market in the 2020 Global Real Estate Transparency Index (GRETI) by Jones Lang LaSalle (JLL) thanks to the progress in its largest markets, Ho Chi Minh City and Hanoi. In this year’s biennial GRETI, Vietnam secured the 56th position.
JLL and LaSalle have been tracking real estate transparency and championing higher standards since 1999. The 11th edition of GRETI covers 99 countries and territories, and 163 city regions. The latest survey has been extended to quantify 210 separate elements of transparency, and has additional coverage of sustainability and resilience, health and wellness, proptech, and alternative sectors.
Stephen Wyatt, country head of JLL Vietnam, said: “It is no surprise that Vietnam has moved from ‘non-transparent’ to ‘semi-transparent’ in our latest transparency index. Over the past 10 years, Vietnam has become a top destination for manufacturing in Southeast Asia and attracted significant foreign investment. Vietnam will need to continue rising through the ranks if it wants to attract more foreign investment.”
|Market growth in Ho Chi Minh City and Hanoi helps pushing up Vietnam’s transparency ranking |
JLL said the 2020 Index has been launched at a time of massive economic and societal disruption where the need for transparent processes, accurate and timely data, and high ethical standards are in closer focus.
The backdrop of COVID-19 is also ensuring that transparency within the Asia-Pacific’s real estate, legal, and regulatory systems is more important than ever to global investors as they look to deploy approximately $40 billion in capital into the region.
In its previous report, JLL said Vietnam, and Southeast Asia in general, have become attractive destinations for foreign investors who want to move out of China.
Besides, many multinational companies have expanded their business in Vietnam.
The report said in 2019, the US’ imports from Vietnam increased by 35.6 per cent but purchases from China decreased by 16.2 per cent.
Chance for luxury real-estate projects
Not only the industrial property market but also the luxury property market has benefited from the shift by companies from China.
A CBRE Vietnam report said the prices of high-end and luxury apartments in Ho Chi Minh City have jumped 10-13 per cent in the last three years.
|Experts expect more developers and buyers to flock to the Vietnamese property and housing market since the country has managed the COVID-19 pandemic very well. |
The price of luxury apartments in the central areas jumped by 40 per cent between 2017 and the end of the third quarter of 2019.
Luxury apartments in central areas and near the metro lines have attracted buyers from Singapore, Japan, and South Korea. About 50 per cent of investors buying these apartments in the secondary market are foreigners, indicating that many foreigners want to settle down in Vietnam.
The open-market policies to attract foreign investors and the rising incomes in the country are the main reasons for Vietnam becoming one of the most dynamic emerging countries and one of the economies that have the highest GDP growth.
Thanks to this, many foreign investors have been flocking to the Vietnamese property market.
Furthermore, property-related taxes are lower in Vietnam than in other countries.
In Ho Chi Minh City, the price of an apartment in the central areas is $5,500-6,500 per square metre, much lower than in Hong Kong and other cities like Kuala Lumpur and Bangkok but the appreciation in prices is much higher.
It is difficult for investors to buy apartments in the central areas of the city due to the lack of developments. The city’s Department of Construction has restricted licences for high buildings here.
|The Grand Manhattan – one of the rare projects in the pipeline in District 1, only a 5-minute walk to Ben Thanh Metro Line |
One of the very few luxury apartment projects being developed in the heart of Ho Chi Minh City, District 1 is The Grand Manhattan by Novaland. This flagship project of Novaland is a complex of three 39-storey apartment buildings, being built on an area of 14,000 sq.m at the intersection of Co Giang and Co Bac streets. It has attracted many foreign buyers thanks to the steady profits it fetches buyers. What makes the project attractive is the free private parking lot that is offered to buyers buying apartments here. Free private parking space is a special offer since it is hard to buy any in the central area of a gigantic city even if one is willing to pay a lot of money.
Experts expect more developers and buyers to flock to the Vietnamese property and housing market since the country has managed the COVID-19 pandemic very well.