There are probably many people who want to invest overseas but are hesitant to take the plunge. For example, if you search for "Vietnam Vietnam real estate" on Google, 30 million pages will appear, but you probably won't hear of anyone actually investing in Vietnam.
So, this time I would like to explain in detail to help you feel more familiar with Vietnam as a real estate destination.
Our company, Suzuki Real Estate, was established in Ho Chi Minh City, Vietnam in 2020, and we will be focusing on what we have felt and experienced while running our business over the past five years.
目次
Elements of Vietnam real estate
When considering investing in Vietnam real estate, you first need to know the following:
- Types of Vietnam property that foreigners can buy
- Purchasing land, office buildings and business sites
- Vietnam Real Estate Title
- Vietnam real estate growth potential
- Vietnam's demographics and rising wages
- Rental demand
- Rising real estate prices
- Vietnam real estate investment risks
- Reasonableness of prices for real estate in Vietnam
- Real-life examples
- Choosing an experienced real estate agent
Now, I will explain them one by one.
Types of Vietnam property that foreigners can buy
It is no exaggeration to say that almost all properties that foreigners can purchase are condominiums.
It is said that it is possible to purchase houses and villas, but the prices are now quite high, at 300 million to 400 million yen, so condominiums are the mainstream investment.
The rights to a condominium are called homeownership rights.
Buying land
We don't receive that many inquiries, but we do receive inquiries from people who want to purchase land.
Land rights are called Land Use Rights and can only be acquired by Vietnamese people.
We do get involved in this, but since it is rare for foreigners to be involved, we will not go into detail here.
Vietnam Real Estate Title
Ownership of a condominium is similar to ownership of a property in Japan.
Vietnam real estate growth potential
When it comes to Vietnamese real estate, let's look at Vietnam's growth potential from the following three perspectives.
Vietnam's Demographics and Youth: IMF GDP per Capita Projections
One episode about "per capita GDP" that left a strong impression on me was something that a friend working at a major insurance company told me when I was considering changing jobs to work at an accounting firm in Hong Kong in 2016.
"Why are you going to Hong Kong?"
He said that Japan was definitely the leader in Asia, and that going to other countries would mean falling behind. However, even back then, I thought that Japan was third in Asia in terms of GDP per capita, after Singapore and Hong Kong, and I felt that there was some strong growth potential overseas.
Meanwhile, the trend of a weak yen and a strong dollar has continued in recent times, and it is said that by 2024, Japan will surpass South Korea and Taiwan on a dollar basis.
It was striking that people who purchased real estate around 2023-2024 believe that Japan will structurally move toward a weaker yen.
Citation:IMF Vietnam GDP per capita forecastBased on this, we created a graph
Vietnamese population, youth and wages
As shown in the following graph, Vietnam's population pyramid is characterized by a "pot-shaped" population with a high proportion of young people aged 25 to 40. The bulk of the population is in the productive age group of 15 to 64, which is the core of the labor force and purchasing power. There are few elderly people, which is said to be due to the impact of the Vietnam War.
Citation:Vietnam's population trends Based on this, we created a graph
Characteristic
- The average age of Vietnamese people is about 31 years old.
- Approximately 651 TP3T of the total population are under 60 years old
- The proportion of young people is high, and the proportion of the productive age population (15 to 64 years old), who are said to be the core of the labor force, is high, especially the proportion of people in their late 20s.
- There is a large population under the age of 15
- The United Nations Population Fund (UNFPA) predicts that Vietnam's population will reach 102.7 million in 2029 and 108.7 million in 2049.
In fact, when I look around Ho Chi Minh City, I see everyone younger than me (I'm 35), and even at my age, I'm often referred to as Ong (a term used to refer to older people).
The problem facing small and medium-sized enterprises like ours is rising wages. According to a survey by JETRO, Japanese companies in Vietnam have been increasing wages by an average of 5-6% every year since 2020. However, my experience running a business in Ho Chi Minh City is that the rate of increase is definitely higher in the Ho Chi Minh City and Hanoi metropolitan areas.
Citation:(JETRO) Survey results on wage growth in Vietnam
Rental demand: Offices expand from Ho Chi Minh City's District 1 to Binh Tan District
Our company regularly provides rental brokerage services for offices, apartments, street shops, etc. in Ho Chi Minh City. Our main customers are foreign expatriates from major business companies in Japan, Taiwan, Korea, China, and ASEAN.
In many cases, offices are based in the central areas of Ho Chi Minh City and Hanoi. In Ho Chi Minh City, the office is located in the center of District 1, and people commute to work from the surrounding districts of Binh Tan, 2, 3, and 7. Recently, office rents in the center have been rising, and it seems that the area that can be called an office district is gradually expanding.
For example, this image, which is featured on our office special page, is an office for rent in Binh Tan District. It was expanded around 2021 due to business expansion, but was originally based near the Vietcom Bank Tower in the center of District 1.
As the central office area expands, residential areas are also expanding to include Districts 2 and 7.
Tenant: Japanese IT company, Reason for rent: Business expansion
Tenant: Chinese company, Reason for rent: New expansion
This office has been rented by a Chinese company that is a global top brand in electrical appliances around 2022. Because it is a top brand, they originally considered locations in the central area of District 1 as well, but they ended up renting an office in District 1, which is close to District 5.
Rental demand: Binh Thanh and District 2 are popular among Japanese and Koreans for apartments
Particularly popular areas for apartments are Binh Tan District and District 2.
Until now, long-established service apartments in Districts 1 and 3 of Ho Chi Minh City were popular.
Currently, many high-rise apartment buildings built several years ago are lined up in Binh Tan District and District 2. Because they are relatively new, the trend of switching from service apartments to condominiums is gradually increasing.
Furthermore, Ward 7 remains very popular with families attending international primary schools.
⇒ Sanwa Pearl Property Information [Lots of experience in supporting sales and purchases]
Rental demand: Shops move from Le Thanh Ton Street to Binh Tan District and District 2
Not only are we expanding our offices, but our retail locations are also expanding.
Previously, Japanese companies were only expanding into Le Thanh Ton in District 1 of Ho Chi Minh City, but recently they have been expanding into Phan Bic Chanh in Binh Tan District and the Tao Dien area in District 2.
⇒Ho Chi Minh City, District 2, Tao Dien rice ball shop
A famous Japanese hot dog restaurant in Canada that operates 14 stores
My Taiwanese friends in Canada knew it well too.
Although the location is not in the Japanese town, the potential customer is Vietnamese, so we showed this property to President Tamura, who decided on it. Recently, the number of Japanese restaurants opening in areas other than Le Thanh Ton Street has been increasing.
⇒ [Column] JapaDog | Ho Chi Minh Binh Tan District, Hot Dog Shop Opening Support, Store Mediation
⇒ Article from Vietnam News VIETJO
A licensed real estate agent with over 7 years of experience residing in Ho Chi Minh City (holds Bookkeeping Level 1 and HSK Level 5 certifications).
Representative of Suzuki Real Estate Vietnam.
To date, we have brokered over 1,000 rental transactions and over 200 sales transactions, primarily with Japanese clients.
We specialize in serviced apartments, condominiums, office brokerage, and real estate contract support for foreigners, and provide support in Japanese, English, and Chinese.
