Statistics show that about 2.5 billion US dollars (USD) of remittances are poured into real estate market, accounting for 22 percent of the total remittances to Vietnam. This number especially increases every Lunar New Year.
According to Savills Vietnam, in the new assessment of Sunny Hoang Ha, deputy director of International Business Department at Savills Hochiminh city, the 2018 Lunar New Year (Tet) is not only the chance for overseas Vietnamese to return home and enjoy Tet but also the time for many of them to choose a good home.
In 2018, the opportunity and conditions to own houses in Vietnam of this special type of customers is assessed positive, under the influence of many factors from the economy to society.
In Hochiminh city, remittances is considered an important resource. Nguyen Hoang Minh, deputy director of the State Bank of Vietnam (SBV) Hochiminh city branch said that in 2017, the amount of remittances to the city was very stable and increased steadily. Estimates from banks’ statistics showed that the remittances to Hochiminh city reached about 5.2 billion USD in 2017, up by approximately 4.5 percent compared to 2016.
According to the Hochiminh city Real Estate Association (HoREA), in 2017, the city attracted 5.81 billion USD of Foreign Direct Investment (FDI), leading the country. In particular, real estate sector ranked the third with 1.9 billion USD. Of the 5.2 billion USD of remittances to Hochiminh city, 22 percent were poured into real estate.
In essence, remittances can be considered as a one-way capital source which has many free investment advantages, while in terms of scale, remittances are fully expected to be equal to the amount of FDI and Foreign Indirect Investment (FII), thanks to the number of approximately 4.5 million overseas Vietnamese, equivalent to nearly 5 percent of the population.
As noted by the banking sector, the ratio of remittances poured into real estate sector reached about 21-22 percent, only after production and business sector. The stability of this cash flow over the years (about 11-12 billion USD each year), has helped real estate sector to attract about 2.5 billion USD every year.
Another reason very promising for overseas Vietnamese as customers of real estate market is the extended legal framework, creating many advantages and also confidence for this type of customers.
However, according to many experts, although the real estate market for this object is considered very attractive due to the high demand, the products to serve them remains fairly limited. With a community of millions of Vietnamese living in the United State, Europe, and neighbouring countries, along with the needs of stable living, working or investing in Vietnam, this segment is assessed as large as the income of this object is relatively high.
Along with that, the real estate market in Vietnam is currently having many favourable factors for customers, such as the diversity of products as well as the price preferences and reasonable customer care programmes of investors.
In addition to the rich choice, the macroeconomic growth and guaranteed security situation also contribute to the investment decision. Moreover, since the State expanded policy allowing overseas Vietnamese to buy residential houses in Vietnam, the ratio of overseas Vietnamese owning houses in the country has been increasing high, although there are still limitations in procedures as well as some legal issues still need to be supplemented.
Considered as an emerging real estate market with rich potential, Vietnam not only draws attention due to the “home” factor but also an attractive investment destination of overseas Vietnamese. To remove barriers, this type of customers as well as foreigners often look for reputable consulting agencies to have the best support for their transactions.
