Why wealthy Vietnamese find foreign real estate attractive

By Ngoc Diem   March 13, 2024 | 12:29 am PT
Why wealthy Vietnamese find foreign real estate attractive
Properties in the eastern part of Ho Chi Minh City. Photo by VnExpress/Quynh Tran
An increasing number of businesses and wealthy individuals are investing in foreign properties, with the U.K., the U.S., Australia, and Japan being prime targets, according to Matthew Powell, head of Savills Hanoi.

A common trait among them is that they are popular education destinations for children of wealthy families.

"Demand stemming from educational needs is the primary motivation for Vietnamese real estate investors to look abroad," Powell said.

The most notable transaction made by a Vietnamese investor was the purchase of an office building on Old Broad Street, London, in 2023.

The £200 million ($255.8 million) deal was the largest in the office building segment in London last year.

Many investors buy foreign properties solely to provide their children with accommodation while they study, he said.

Some are admittedly interested in properties that generate cash flows, such as offices and hotels, he added.

Savills expected demand for foreign real estate among Vietnam’s ultra-rich population to increase in the coming years, leading to a need for specialized advisory services.

This demand is driven by the growing number of ultra-rich individuals in the country, which is expected to top 1,500 by 2026, according to data from Germany-based statistics site Statista.

Last year Vietnamese investment in overseas properties was worth nearly US$421 million, according to data from the Ministry of Planning and Investment.

The most popular sectors for investment by enterprises are real estate, construction, wholesale, retail, and power.

Meanwhile, Vietnam’s real estate is also attracting foreign investors.

Savills noted there are more investors from India, Hong Kong and Singapore, who are eyeing the housing markets in Hanoi, Ho Chi Minh City and Da Nang City for their diverse range of high-quality properties and lucrative rental yields.

Once amendments to the laws that have been passed take effect, the real estate market will become more transparent and likely see an even greater influx of foreign investment, according to Savills.

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