“Up-and-coming areas” or “property hotspots” are commonly used phrases for areas in cities that are experiencing renewed buyer interest. The same phrases can be applied to countries that have begun to attract the attention of the international property-buying community. Vietnam is the latest property hotspot and it’s proving very attractive to mainland Chinese investors and landlords as I saw for myself last year when I visited to meet new clients.
Part of Vietnam’s appeal is the fact that prices in nearby Hong Kong have skyrocketed. By comparison, Vietnam’s developers are doing what they can to encourage overseas investment as just 30% of units in each development can be sold to foreign investors. In fact, Vietnam only opened its property market ‘doors’ to the international community in 2015 and its property market is still finding its feet.
So as a relatively new investment opportunity, infrastructure improvements are moving at a fast pace to keep up. Ho Chi Minh City’s first one-line metro is scheduled for opening in 2020 and Hanoi’s six-line metro is due to open in 2018. Both cities are witnessing major industrial investments too, notably South Korean giant Samsung has expansion plans to add to its already 4,500-strong workforce in Hanoi. Stunning coastal areas like Danang are also seeing a leisure boom with a demand for second homes.
There is however, one major drawback, all land is owned by the state and land leases are only available for 50 years for foreign buyers. This means that buyers will have to sell before the lease expires or risk losing their investment. In addition, Vietnam isn’t yet an established market – the Vietnamese dong has steadily lost value against other currencies over the next two years and there are no guarantees that the investment will bring any long-term returns.
Historically, established property markets such as London offer a much safer investment. Rental demand continues to outstrip supply as young professionals flock to the capital for its employment opportunities. In addition, with some of the finest educational facilities in the world, there is no shortage of overseas students seeking good quality accommodation. Ongoing uncertainty over Britain’s exit from the European Union has caused the pound to depreciate which means that now is the time to buy high-quality property at low prices. Buy-to-let investment opportunities in London have an added advantage as the property itself will continue to increase in value.
Vietnam is also an emerging market for UK property investment- the Vietnamese are astute savers and are looking for good investment opportunities. In a similar fashion to Chinese investors, they require a dedicated personal service to navigate the complexities of buying UK property. It is a level of service that we are happy to provide for our international clients.
Vietnam may well be the new property hotspot, while there is significant industrial investment, buy-to-let opportunities in its two main cities will continue to appeal. However, It is advisable too for investors to think long-term and balance their portfolio with property in more stable and established markets.
For London property market insights and insider advice on how to make wise long-term investments, why not book a London property seminar today? Myself and my fellow directors will visiting Singapore, Hong Kong and Malaysia in July and are available for private consultations at the link above.
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