Written By: Jacquelyn Annete García Vadnais
Asia is becoming a hotspot for global investors to invest in property. Many countries in Asia had been restricted regarding foreign ownership for some time. However, now that there is so much interconnectivity in the global real estate market, it has become possible to invest in less-common markets with ease. One such market that is starting to be explored is in Vietnam, particularly in Hanoi. The reason for this is that the prices are substantially lower, and subsequently there is greater room for growth, than neighboring powerful cities in Asia. An investor that is just starting out will be able to find a great investment in Hanoi while Vietnam’s economy is greatly expanding due to multiple factors, including increased foreign direct investment. If you are considering investing in Hanoi, consider the information below before deciding to invest in your next property:
A Brief History of Vietnam
Vietnam has a rich, and diverse history. Historically, the region has been made up of communities, and semi-nomadic tribes relocating from other parts of Asia. China ruled Vietnam for a period of time between 111 B.C until the 15th century. During the colonial era, France ended up gaining prominence and established its power in the early 19th century. However, Vietnam had a clear divide that was occurring between the Northern and Southern parts of the country. The tensions between the North and South were related to China, and its influence in the North, while the south represented the French colonial powers. Today, Vietnam is a united socialist republic. The economy is steadily growing, as is foreign direct investment, and the manufacturing sector. Hanoi specifically is known for its rich architecture, and culture. The Chinese, southeast asian, and French influences make for a unique mix of styles. For the sightseer, there is much in the way of museums, architecture, and culture. In addition, there is a mosque, several well known churches, and a chabad. These are several factors to keep in mind when considering investment in Hanoi, Vietnam.
Why Hanoi Is an Excellent Market for Real Estate Investment
Hanoi is an excellent market for real estate investment as many luxury markets around it are oversaturated and very pricey. Hong Kong, Taipei, Shenzhen, Guangzhou, and Macau are all very mature markets that have experienced a great deal of expansion in terms of foreign direct investment. What this means is that investors are now looking for alternative opportunities for foreign direct investment that have a lower buy in. Hanoi meets this criteria as the cost of real estate, and living is substantially lower than other more saturated markets in Asia.
In terms of transportation, Hanoi has recently completed its metro line, which will be a substantial improvement to the city. There are already several multinational companies within Vietnam that create large numbers of jobs for both foreigners and expats alike. Due to these factors, there will likely be a surge in property values for those that are renting or flipping their real estate. In 2017 alone, the price of apartments increased in Hanoi by 3.6%.
Tourism is quite popular in Hanoi due to the proximity of Halong Bay and beach resorts along the small beach cities facing the Pacific Ocean. Hanoi serves as a hub to start more in-depth trips of Vietnam, which makes having an apartment there very lucrative for investors that want continuous rental earnings from both short-term tourists or longer-term expats.
Rental yields, depending on where you invest in Vietnam, can range from 8 – 12%, which is substantially higher than the 3% yields that investors see in Singapore, and other mature markets. The reason for these rental yields being so substantial is Vietnam is in the unique position where their market started from the ground up. Those who are buying properties at low prices and then charging competitive rents in cities of around $800 for a one-bedroom apartment will see great yields compared to other parts of the world.
Things to Be Aware of When Investing in Hanoi
A very important issue when investing in Hanoi is to understand how land ownership rights work there. Vietnam is a highly regulated country and with that comes regulations from the government about who can own land and for what duration. The distinction in land ownership comes from the actual lot where the house is versus the house or apartment itself. In Vietnam, foreigners and citizens are not able to own physical land but can own the dwelling that is on the land. It is suggested to consult a lawyer, or at a minimum to be very careful with any buying agreement to see what clauses of protection are there for if the government decides to build a railroad track where the dwelling is, or intends to use the land for another purpose.
Final Remarks
Vietnam has absolutely had a fascinating, and challenging history. However, now that the dust has settled, good governance, and foresight has yielded a stable, and booming economy. This has proved to be appealing to all kinds of investors, including prospective real estate investors. Since the initial focus was on other markets in Asia, it is important to realize that Hanoi still retains substantially lower prices than other neighboring large cities in Asia. Due to how much tourism their is in Hanoi, there will be an endless cycle of visitors for landlords to host and profit from. In terms of flipping real estate, there will also be a possibility of seeing a substantial increase in value due to the increasing value of real estate in Hanoi. The plethora of multinational companies in Hanoi will only increase the value of real estate along with the newly completed metro. It will be fascinating to see what happens in Hanoi in the years to come in terms of economic expansion, development, and overall improvements to the quality of life in the city.
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Jacquelyn Annete Garcia Vadnais is an Investment Consultant and field expert blogger for Barracuda Consulting.
Jacquelyn has a JD/ MBA from Suffolk University, an LL.M in International Law from the University of Miami, and a B.A. from the George Washington University in International Affairs with a Concentration in International Politics. Jacquelyn speaks English, Spanish, French, and Portuguese and has lived in ten countries. Jacquelyn has done work for firms such as Boston Consulting Group and has worked with firms based in over ten countries in the fields of Real Estate, International Law, Expat Living, International Business, Forex Trading, and Travel. She has also volunteered her time and expertise at the Victims Rights Law Center based in Boston, MA.
Please leave your comments below. If you would like to subscribe to our newsletter, click here: https://tinyletter.com/barracuda-consulting. To purchase a full real estate report, or to access a complete suite of investment advisory services please contact us: https://www.barracuda-consulting.net/contact.
Asia is becoming a hotspot for global investors to invest in property. Many countries in Asia had been restricted regarding foreign ownership for some time. However, now that there is so much interconnectivity in the global real estate market, it has become possible to invest in less-common markets with ease. One such market that is starting to be explored is in Vietnam, particularly in Hanoi. The reason for this is that the prices are substantially lower, and subsequently there is greater room for growth, than neighboring powerful cities in Asia. An investor that is just starting out will be able to find a great investment in Hanoi while Vietnam’s economy is greatly expanding due to multiple factors, including increased foreign direct investment. If you are considering investing in Hanoi, consider the information below before deciding to invest in your next property:
A Brief History of Vietnam
Vietnam has a rich, and diverse history. Historically, the region has been made up of communities, and semi-nomadic tribes relocating from other parts of Asia. China ruled Vietnam for a period of time between 111 B.C until the 15th century. During the colonial era, France ended up gaining prominence and established its power in the early 19th century. However, Vietnam had a clear divide that was occurring between the Northern and Southern parts of the country. The tensions between the North and South were related to China, and its influence in the North, while the south represented the French colonial powers. Today, Vietnam is a united socialist republic. The economy is steadily growing, as is foreign direct investment, and the manufacturing sector. Hanoi specifically is known for its rich architecture, and culture. The Chinese, southeast asian, and French influences make for a unique mix of styles. For the sightseer, there is much in the way of museums, architecture, and culture. In addition, there is a mosque, several well known churches, and a chabad. These are several factors to keep in mind when considering investment in Hanoi, Vietnam.
Why Hanoi Is an Excellent Market for Real Estate Investment
Hanoi is an excellent market for real estate investment as many luxury markets around it are oversaturated and very pricey. Hong Kong, Taipei, Shenzhen, Guangzhou, and Macau are all very mature markets that have experienced a great deal of expansion in terms of foreign direct investment. What this means is that investors are now looking for alternative opportunities for foreign direct investment that have a lower buy in. Hanoi meets this criteria as the cost of real estate, and living is substantially lower than other more saturated markets in Asia.
In terms of transportation, Hanoi has recently completed its metro line, which will be a substantial improvement to the city. There are already several multinational companies within Vietnam that create large numbers of jobs for both foreigners and expats alike. Due to these factors, there will likely be a surge in property values for those that are renting or flipping their real estate. In 2017 alone, the price of apartments increased in Hanoi by 3.6%.
Tourism is quite popular in Hanoi due to the proximity of Halong Bay and beach resorts along the small beach cities facing the Pacific Ocean. Hanoi serves as a hub to start more in-depth trips of Vietnam, which makes having an apartment there very lucrative for investors that want continuous rental earnings from both short-term tourists or longer-term expats.
Rental yields, depending on where you invest in Vietnam, can range from 8 – 12%, which is substantially higher than the 3% yields that investors see in Singapore, and other mature markets. The reason for these rental yields being so substantial is Vietnam is in the unique position where their market started from the ground up. Those who are buying properties at low prices and then charging competitive rents in cities of around $800 for a one-bedroom apartment will see great yields compared to other parts of the world.
Things to Be Aware of When Investing in Hanoi
A very important issue when investing in Hanoi is to understand how land ownership rights work there. Vietnam is a highly regulated country and with that comes regulations from the government about who can own land and for what duration. The distinction in land ownership comes from the actual lot where the house is versus the house or apartment itself. In Vietnam, foreigners and citizens are not able to own physical land but can own the dwelling that is on the land. It is suggested to consult a lawyer, or at a minimum to be very careful with any buying agreement to see what clauses of protection are there for if the government decides to build a railroad track where the dwelling is, or intends to use the land for another purpose.
Final Remarks
Vietnam has absolutely had a fascinating, and challenging history. However, now that the dust has settled, good governance, and foresight has yielded a stable, and booming economy. This has proved to be appealing to all kinds of investors, including prospective real estate investors. Since the initial focus was on other markets in Asia, it is important to realize that Hanoi still retains substantially lower prices than other neighboring large cities in Asia. Due to how much tourism their is in Hanoi, there will be an endless cycle of visitors for landlords to host and profit from. In terms of flipping real estate, there will also be a possibility of seeing a substantial increase in value due to the increasing value of real estate in Hanoi. The plethora of multinational companies in Hanoi will only increase the value of real estate along with the newly completed metro. It will be fascinating to see what happens in Hanoi in the years to come in terms of economic expansion, development, and overall improvements to the quality of life in the city.
--
Jacquelyn Annete Garcia Vadnais is an Investment Consultant and field expert blogger for Barracuda Consulting.
Jacquelyn has a JD/ MBA from Suffolk University, an LL.M in International Law from the University of Miami, and a B.A. from the George Washington University in International Affairs with a Concentration in International Politics. Jacquelyn speaks English, Spanish, French, and Portuguese and has lived in ten countries. Jacquelyn has done work for firms such as Boston Consulting Group and has worked with firms based in over ten countries in the fields of Real Estate, International Law, Expat Living, International Business, Forex Trading, and Travel. She has also volunteered her time and expertise at the Victims Rights Law Center based in Boston, MA.
Please leave your comments below. If you would like to subscribe to our newsletter, click here: https://tinyletter.com/barracuda-consulting. To purchase a full real estate report, or to access a complete suite of investment advisory services please contact us: https://www.barracuda-consulting.net/contact.
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