Number of Chinese buying high-end Saigon apartments skyrockets

By Dy Tung, Dat Nguyen   December 13, 2018 | 05:12 pm PT
Number of Chinese buying high-end Saigon apartments skyrockets
Data from CBRE Vietnam shows that 31 percent of high-end apartment buyers in Ho Chi Minh City are Chinese. Photo by Shutterstock/Tommy Teo
Attractive prices and returns have seen the number of Chinese customers buying high-end apartments in HCMC soar this year.

Duong Thuy Dung, senior director of real estate market research firm CBRE Vietnam, said at a recent forum that 31 percent of high-end apartment buyers in HCMC in the first nine months were Chinese. This figure increased from only 2 percent in 2016 and 4 percent last year.

In the last two years, Chinese were sixth among all buyers, but this year, they have surpassed Vietnamese to rank first.

Only 24 percent of high-end home buyers are Vietnamese, CBRE data shows.

Stephen Wyatt, country head of property service firm JLL Vietnam, said the number of Chinese buyers has been increasing because Vietnam has an attractive price compared to other markets like Hong Kong, Japan, Singapore, South Korea and Taiwan.

Chinese people often compare prices in Vietnam with Shanghai when they buy properties, he said, adding that they hope to gain profit from higher property prices in Vietnam in the future.

A high-end apartment in the city costs around $5,000 per square meter, but the same one in Hong Kong could cost four times, said Nguyen Khanh Duy, director of residential sales at real estate service provider Savills HCMC.

Nguyen Hoang, director of research and development at real estate firm DKRA, said that the number of Chinese and South Korean buyers in HCMC started to increase last year.

Chinese from Shanghai and Hong Kong are buying properties as investments (not to stay in). "Most projects that foreigners bought in the last two years are under construction," he said.

Other industry insiders said that the high returns that HCMC high-end apartments offer is attracting many foreign buyers.

The rate of return is 5-6.5 percent in Thao Dien ward and Thu Thiem Peninsula in District 2, while in other Asian countries, this rate is only 3.7-5.2 percent, Duy said.

CBRE senior director Dung added that it was not just Chinese, but foreign buyers in general who are showing an increasing interest in HCMC real estate. 

Dung said that each foreigner group has a different preference for high-end apartments. Customers from mainland China, Hong Kong and Taiwan prefer large-scale projects near the downtown HCMC.

South Koreans like to buy apartments in the southern District 7 that hosts a large community of South Koreans, while Western buyers often look for a quieter lifestyle in eastern District 2.

Dung said HCMC is estimated to receive 40,000 new apartments in the 2018-2020 period, 60-70 percent of these in the high-end segment.

In the last three years 35,000 luxury apartments have come into the market, UK newspaper Financial Times quoted CBRE as saying.

This is a major increase from 2012-2014 when fewer than 10,000 units were on offer, CBRE said.

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