Real Estate Prices in Vietnam

tintinmiami2013 wrote:

MikeTVN wrote:

Why is real estate so expensive in Vietnam relative to income level. Average monthly income in VN is about 1/25th ($148 vs $3,714) of the US and yet real estate prices are fairly equal to the US when you consider the same amount of land. That makes it 25 times more expensive than in the US. I think. Your thoughts?

You make an EXCELLENT point.  Although I bought a new condo/apartment in District 2 (now Thu Duc city) for $65,000 USD - 60 sq meters.  Compare to where I was living (Miami, Washington D.C) you can't get a new apartment condo for 60 sq meters with a magnificent  city view for that price. 

So I do think it's better to buy in Vietnam then I can sell it later.   After living here for 5 years, the neighbors just sold their apartment for double the price that they bought it for.  So you can definitely make money investing in real estate in VN.

Yes I am not too familiar with condo prices in either country. I should have specified in my post that I was really referring to single family homes with land. Its sounds like for condos that you may have a good point.

richiv wrote:

To answer the OPs question: TINA, there is no alternative. Unlike most developed countries where people can invest in stocks (domestic or foreign), a wide variety of bond, private equity, and mutual funds, real estate, etc., in Vietnam people are pretty much limited to local real estate because the local stock market has few good companies and currency controls mean that foreign markets are off limits. So savings, speculative money, and black market gains are all pushed into real estate which forces prices up, which brings in even more money as people see prices continuously rise, and the bubble keeps inflating. A bit like the US stock market at present. To give you an idea how expensive prices are here on a relative basis, I recently bought a nice piece of land in one of the most popular Japanese ski resorts for less than 1/10th of the land price near Hoi An or Da Hang where I live. Of course Japanese building costs are far higher, so the final cost of a house may not be that different...

Good point. I didn't know foreign stocks were off limits.

This is the last info I saw. It's difficult for individuals although I think some people get around the regs in a small way.blogs.duanemorris.com/vietnam/2016/02/24/overseas-securities-investment-by-vietnamese-residents/

MikeTVN wrote:

tintinmiami2013 wrote:

MikeTVN wrote:

Why is real estate so expensive in Vietnam relative to income level. Average monthly income in VN is about 1/25th ($148 vs $3,714) of the US and yet real estate prices are fairly equal to the US when you consider the same amount of land. That makes it 25 times more expensive than in the US. I think. Your thoughts?

You make an EXCELLENT point.  Although I bought a new condo/apartment in District 2 (now Thu Duc city) for $65,000 USD - 60 sq meters.  Compare to where I was living (Miami, Washington D.C) you can't get a new apartment condo for 60 sq meters with a magnificent  city view for that price. 

So I do think it's better to buy in Vietnam then I can sell it later.   After living here for 5 years, the neighbors just sold their apartment for double the price that they bought it for.  So you can definitely make money investing in real estate in VN.

Yes I am not too familiar with condo prices in either country. I should have specified in my post that I was really referring to single family homes with land. Its sounds like for condos that you may have a good point.

Quite simply.. greed. I live in an apartment building that is mid-range, owners and investors get in at planning level usually with loads from family or banks.

Plan to make three or four times their investment. At one time this would work, but now there are thousands of empty apartments across the city with dozens of new complexes going up

People borrow to buy, hoping for far profit... No sale happens at the price they want. Cannot afford to sell for less than they paid + interest.

Next building over from me has around 1100 apartments, at best 300 are occupied.

Jlgarbutt wrote:

MikeTVN wrote:

tintinmiami2013 wrote:

You make an EXCELLENT point.  Although I bought a new condo/apartment in District 2 (now Thu Duc city) for $65,000 USD - 60 sq meters.  Compare to where I was living (Miami, Washington D.C) you can't get a new apartment condo for 60 sq meters with a magnificent  city view for that price. 

So I do think it's better to buy in Vietnam then I can sell it later.   After living here for 5 years, the neighbors just sold their apartment for double the price that they bought it for.  So you can definitely make money investing in real estate in VN.

Yes I am not too familiar with condo prices in either country. I should have specified in my post that I was really referring to single family homes with land. Its sounds like for condos that you may have a good point.

Quite simply.. greed. I live in an apartment building that is mid-range, owners and investors get in at planning level usually with loads from family or banks.

Plan to make three or four times their investment. At one time this would work, but now there are thousands of empty apartments across the city with dozens of new complexes going up

People borrow to buy, hoping for far profit... No sale happens at the price they want. Cannot afford to sell for less than they paid + interest.

Next building over from me has around 1100 apartments, at best 300 are occupied.

you should not generalise because everywhere in HCMC is not like D2. Here at Celadon City 99% of the apartments are sold & occupied even the penthouse ones. Only the ground floor shop houses are 50% occupied.

Before I came here 6 or 7 months back I looked to buy a 73m3 2 bed 2 WC bay window place with park view & the price was 3.3 billion. Now places exactly like that are going for up to 3.8 depending on furnished or not & they are not even on the market a week & gone.
Today there is advertised a 60m2, 2 bed 1 wc garden view & its on the market for 3.6 fully furnished (if you like typical Vietnamese furnished that is) . That same place pre Covid would have been 3 billion max.
Even taking into account negotiating a discount with is normal.

Wish I had bought!!

@MikeTVN Funny is that Monaco, Hong Kong, Singapore population is much denser per square kilometer and the price are much lower than VN.

Land is expensive in Vietnam because there's not a lot of it. Vietnam is smaller than California in size and has a population of 95 million people (almost a 1/3 of US population). Also there are no annual property taxes in Vietnam compared to the US where most cities charge around 1% of the property value. In essence, ownership in US property is more costly to maintain overtime.
-@CoderX10

Funny thing is that Monaco, Hong Kong, and Singapore population is much denser per square km and they are much cheaper than VN. Perhaps a closer look at the corruption and the lack of property tax would give us a better picture.

California prices ( home of the insane) don't reflect the rest of the nation!

@MikeTVN Funny is that Monaco, Hong Kong, Singapore population is much denser per square kilometer and the price are much lower than VN.
-@Viet Quoc Trinh

Monaco is very expensive, one of the most expensive places to live in the world.

Rather than trying to analyze whether or not each city is more expensive, I think we should focus on the last bit that Viet Quoc Trinh brought out about property taxes.   This was discussed several years ago on this forum and is just as true today.   At least Vietnam got rid of the ridiculous idea of taxing urban property based on its previous rice yield but no property tax at all is a real problem.   Property taxes serve multiple functions.   They of course raise money for the government.  They also serve as income levelers which should be attractive in a nominally Socialist country.   A third aspect is that they impose a cost for sitting on real property and hence keep markets fluid by inducing owners to sell.  Additionally as they are based on recorded items, they are difficult to avoid unlike income taxes which must be vastly underpaid in Vietnam (but that's another whole kettle of fish. )

The problem with property taxes is that they have two aspects;   rates and valuations.    The trick is to get these set at a level which will not overly burden homeowners like retirees who may be "land rich and money poor."   Still, having no carrying costs for speculators must be a significant part of what allows prices to remain high or even increase, while apartments remain empty. 

My exact same thoughts.

Real estate is overpriced in VN as you noted with the average income. There is a block of land near my hem it's around 200 sqmts and its selling for 350k usd. It's not on a main road, it's not a commercial block, just a house block. It's not even in Saigon or Ha Noi, but located in an outer ward of Vung Tau. Prices are just outrageous, I feel sorry for the average Vietnamese trying to buy.
-@colinoscapee

Yes Vung Tau seems to be right up there with Saigon. I would love to build in VT after going there. For me the weather is # 1. It's like South Florida. But as far as the area Saigon and Da Nang more.

California prices ( home of the insane) don't reflect the rest of the nation!
-@Hooked

I'm really comparing to South Florida which I think is more expensive than the average US I believe but certainly not California.

I realizing now that it's really the land in VN that is more expensive. The houses are cheap to build.

Some 280m2 house in D7, HCMC (PMH Area) can cost up to VND90bil (USD $3.8m), while renting for $2500/month. The price/rent ratio of 125!

My prediction is house/apartment prices would see a moderate drop by the end of 2023.