Vietnam real estate attracts foreign investors, surprises about apartment prices in HCMC, rights of home owners

Strong increase in FDI capital poured into real estate, survey of apartment prices of some projects in HCMC, regulations on homeowner rights... are the latest real estate news.

FDI capital plays a big role in the Vietnamese real estate market in clearing supply and standardizing the market. (Photo: Linh An)

FDI inflow into real estate increased sharply

According to the latest data from the General Statistics Office, as of August 31, the total registered foreign direct investment (FDI) capital in Vietnam reached 20.52 billion USD, an increase of more than 8% over the same period last year. Notably, the real estate business sector accounted for nearly 20% of the total newly registered capital, 5.1 times higher than the same period. If including newly registered capital and adjusted registered capital, registered FDI capital in real estate business activities reached 2.55 billion USD, 3.7 times higher than the same period and accounting for nearly 14.4% of the total newly registered and increased capital.

Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn, said that FDI capital plays a big role in the Vietnamese real estate market in clearing the supply and standardizing the market with strict criteria of foreign capital in terms of legality, planning, and product development methods. Some segments such as industrial real estate, office, housing, and resort - the types that foreign investors are interested in - will be directly affected by this capital.

According to Mr. Quoc Anh, three laws related to the real estate market, namely the Housing Law 2023, the Real Estate Business Law 2023 and the Land Law 2024, officially take effect, creating a clear corridor for the real estate market, combined with a stable economic development and strong investment in infrastructure, making the Vietnamese real estate market attractive in the eyes of foreign investors. Foreign investors have confidence and they pour more money into Vietnam thanks to the support of legal firms.

Mr. Troy Griffiths, Deputy Managing Director of Savills Vietnam, said that some segments such as retail, resort, office and residential real estate are having positive developments thanks to FDI capital.

Specifically, in retail real estate, AEON Mall is continuing its expansion plan with the opening of AEON Mall Hue (8.6 hectares) in September. This unit has also acquired a 10.5-hectare land plot in Thanh Hoa to build the largest commercial center in the Central region and has approved the 1/500 Master Plan for the AEON Mall Bien Hoa project (12 hectares). Becamex IDC has also started a 7-hectare commercial complex project in Binh Duong New City.

In the resort real estate sector, international tourists are returning to Vietnam with more than 11.4 million arrivals in the first eight months of 2024, up 45.8% year-on-year and 1% higher than in 2019. By 2028, 191 hotel projects are expected to bring approximately 49,800 rooms; 75% of this new supply is in the mid-range to high-end segment, with 70% branded by international luxury hotel chains, positioning Vietnam as a key market in the region.

In the housing market, Cosmos Initia, TT Capital and Koterasu Group launched the TT AVIO project in Binh Duong, providing nearly 2,000 affordable apartments; Vinhomes introduced the 385-hectare Vinhomes Global Gate project in Hanoi , including more than 4,100 low-rise apartments and 12,600 high-rise apartments...

In terms of the office market, approximately 35,000 square meters of office floor space will be added in Ho Chi Minh City in the second half of 2024 from three Grade B and C projects: Thaisquare The Merit, Vinatex Building and CMC Tower B. In Hanoi, two Grade A projects, Taisei Ha Noi Office Tower and Heritage West Lake, will add another 46,000 square meters by the end of the year.

According to Mr. Troy Griffiths, it is not difficult to see that the projects with the participation of FDI capital sources above all ensure transparency and legal clarity. For foreign investors, this is a prerequisite for them to decide to invest in real estate projects in Vietnam.

Apartment selling price approaches 500 million VND/m2

According to the report on the housing market in Ho Chi Minh City and surrounding areas in October 2024 by DKRA Group, the apartment supply decreased slightly compared to the same period and was mainly concentrated in Ho Chi Minh City and Binh Duong.

Market demand has shown signs of recovery, mostly from new projects launched for sale this month in Binh Duong and Long An.

Data from DKRA Group shows that the primary selling price of apartments continues to be high due to input cost pressure. The selling price of some projects in provinces bordering Ho Chi Minh City recorded an increase of 3-8% compared to the basket of products sold 3-6 months earlier.

For the secondary market, selling prices and liquidity continue to recover, with transactions concentrated in projects that already have pink books or are in the process of preparing to hand over houses.

Regarding the selling price of primary apartments, according to DKRA Group, in Ho Chi Minh City, the price ranges from 30 - 493 million VND/m2, Binh Duong from 26 - 59 million VND/m2, Ba Ria - Vung Tau from 35 - 61 million VND/m2, Dong Nai from 33 - 41 million VND/m2, Long An from 21 - 29 million VND/m2.

Analyzing housing accessibility, Savills Vietnam experts said that in the period of 2019 - 2023, housing prices in Ho Chi Minh City increased by an average of 3% per year, equal to the increase in personal income. The gap between housing prices and income is growing, making it more difficult for people to own a house.

Every year, middle-income earners and young households in Ho Chi Minh City need about 50,000 apartments. However, the supply is still not enough to meet the demand.

Surveys show that most of the apartment projects in Ho Chi Minh City offered for sale in the third quarter of 2023 are in the high-end segment and located in the East of Saigon. For example, the next phase of the Eaton Park project in Thu Duc City is being offered by Gamuda Land at an average price of VND140 million/m2.

Masterise Home has also just launched 2 apartment buildings of the Masteri Grand View project with prices starting from 100 million VND/m2. This is the first high-rise subdivision of the new urban area The Global City, Thu Duc City.

At Vinhomes Grand Park Urban Area, Thu Duc City, the next phase of The Opus One subdivision is also being offered for sale at around VND100 million/m2. After completing 5 basements, the King Crown Infinity project is opening the next basket of products for sale with prices ranging from VND100 - 125 million/m2.

According to the plan, in the Green City project, the city will reserve 67,216.8 square meters of land for building schools and public facilities for business purposes. (Source: XD Newspaper)

Vingroup Corporation received handover of more than 127.4 hectares of land to build the Green City project.

The Hanoi People's Committee has just decided to hand over more than 127.4 hectares of land (phase 1) in the communes of Tan Hoi, Lien Trung, Tan Lap, Lien Ha in Dan Phuong district, which has completed site clearance, to Vingroup Corporation - JSC to implement the Urban Functional Area project - Green City.

According to Decision No. 6011/QD-UBND dated November 18, 2024 of the Hanoi People's Committee, out of the total of more than 127.4 hectares of land allocated in the first phase, there are 409,786.6 square meters of residential land with the form of land use being State land allocation with land use fee collection.

The area to be delivered this time includes 296,011.7m2 of residential land for building low-rise housing; 113,774.9m2 of residential land for building high-rise housing, with functions such as: commercial services, offices, hotels, apartments,...

According to the plan, in the Green City project, the city will reserve 67,216.8 square meters of land to build schools and public facilities for business purposes. The form of land use is that the State leases land and collects land rent once for the entire lease term. The land lease term is 50 years. The project will build junior high schools, primary schools, kindergartens; build commercial service facilities, markets...; urban administration, community activities; medical centers; cultural houses, community activities.

The city also stipulates 702,065.7m2 of land for trees and traffic, the State allocates this land without collecting land use fees; 17,470.7m2 of land for technical infrastructure construction including: wastewater treatment area, solid waste transfer area, planned technical infrastructure area, water plant, pumping station; 11,939.4m2 of land above ground of the project for yard, internal road, technical infrastructure works and planting trees for common use.

Vingroup Corporation - JSC is responsible for synchronously constructing technical infrastructure, maintaining and repairing the project after construction investment and handing it over to the local government for management and common use of the city...

Notably, in this project, the City reserved 8,945.6 square meters of land in plots with symbols from C-TT5.1 to C-TT5.7 for resettlement areas. Vingroup Corporation - JSC is responsible for investing in synchronous infrastructure construction, and after completion of construction, handing it over to the district. The form of land use is that the State allocates land without collecting land use fees.

Rights of home owners

Article 10 of the 2023 Housing Law stipulates the rights of home owners and home users as follows:

1. Homeowners who are domestic organizations, individuals, or Vietnamese people residing abroad have the following rights:

a) Have the right to inviolability of the housing under his/her legal ownership;

b) Using housing for residential purposes and other purposes not prohibited by law;

c) Be granted a Certificate for the house under one's legal ownership according to the provisions of this Law and the law on land;

d) Selling, leasing, donating, exchanging, bequeathing, mortgaging, contributing capital with housing according to the provisions of this Law, the law on land and other relevant legal provisions; transferring contracts for buying and selling housing, leasing, lending, letting, authorizing housing management and other rights according to the provisions of law; in case of donating or bequeathing housing to a subject who is not eligible to own housing in Vietnam, this subject is only entitled to the value of that housing.

In case the Land Law has other provisions on the rights of home owners associated with land use rights who are Vietnamese residing abroad, such provisions shall apply;

d) Shared use of public utilities in that housing area according to the provisions of this Law and other relevant legal provisions.

In case of being an apartment building owner, he/she has the right to jointly own and jointly use the common property of the apartment building and the common infrastructure of that apartment building, except for the constructions built for business purposes or must be handed over to the State according to the provisions of law or according to the agreement in the house purchase and sale or lease-purchase contract;

e) Maintenance, renovation, demolition and reconstruction of houses according to the provisions of this Law and the law on construction;

g) Have the right to own housing protected according to the provisions of Article 7 of this Law;

h) Complain, denounce, and file lawsuits against acts of violating one's legitimate ownership rights and other acts violating the law on housing;

i) Other rights as prescribed by law.

2. Homeowners who are foreign organizations or individuals have the rights specified in Article 20 of this Law.

3. Housing users who are not home owners are entitled to exercise their rights in managing and using the home according to the agreement with the home owner.

Thus, home owners have the rights as prescribed above.

Source: https://baoquocte.vn/bat-dong-san-moi-nhat-dia-oc-viet-nam-attracts-von-nha-dau-tu-ngoai-bat-ngo-ve-gia-can-ho-tai-tphcm-quyen-cua-chu-so-huu-nha-o-294775.html