Ho Chi Minh City and Hanoi are the country's two main
metropolitan centres for investment, given their population
profile, extent of FDI and their excellent location.
Other areas that present good opportunities are tourist and
resort areas along the coast.
Ho Chi Minh City
Ho Chi Minh offers the vibrancy of a commercial city, complete
with high rise buildings and the hustle and bustle of a plethora of
shops, alongside the legacy of an ancient and fascinating culture.
It is often known as the 'Pearl of the Far East' or the 'Paris in
the Orient' due to the strong French colonial influences still
evident in the city. HCMC is the largest city in Vietnam as well as
the economic and financial centre. The city's population is growing
at 1.6% a year, with one of the fastest growing micro-economies in
the world. Moreover, it is the biggest receiver of FDI in Vietnam.
As such, it attracts both domestic migrants, especially a growing
Vietnamese middle class, as well as growing numbers of expatriates,
creating a high demand for residential housing. This demand is only
set to increase with WTO membership, as growing numbers of expats
require rentals. HCMC's planning department have predicted that
more than 30 million square metres of residential accommodation
needs to be built between 2005 and 2010, in order to meet
demand.
As a result Ho Chi Minh City offers a good potential market for
capital appreciation as well as rentals. Prices in several areas of
Ho Chi Minh City have doubled within the first three months of
2007.The accommodation shortage in Ho Chi Minh City is starting to
push rental prices up too. It is not uncommon to see yields of
10-14% in central districts of HCMC as demand outstrips supply.
Some sources warn of a potential bubble and unsustainable prices
in certain areas of major cities, like Ho Chi Minh City. Therefore
buyers should investigate the local situation when considering
property here. Prices of luxury apartments are particularly high
and rising. High end apartments can go for as much as US$1,000-
$2,300 per sq. m. in central districts such as Phu My Hung.
However, on the outskirts of the city prices are lower at less than
US$600 per sq. m.
Hanoi
As the cultural capital of Vietnam, complete with its 18
stunning lakes, the Temple of Literature and the One Pillar Pagoda,
Hanoi boasts both cultural beauty and commercial success. Situated
on the banks of the Red River it is a cultural wonder to the
foreign tourist, embodying a fascinating mix of influences from
East and West, and the presence of the French and the Chinese is
evident in the architecture. Like HCMC, Hanoi is receiving a great
deal of FDI and the non-state economic sector is expanding rapidly
with more than 25,000 businesses now operating under the Enterprise
Law. Real estate projects form a key proportion of this FDI,
attracting nearly 70% of the FDI capital in the first half of 2007.
On top of this, key infrastructure improvements are underway that
will make the city more desirable, such as new plans to build a
subway in the city.
As the economy continues to grow, demand for housing will only
increase and is set to rise to 26,000 apartments in 2010, a figure
nearly three times higher than current supply. Prices are
relatively high by the country's standards. Most apartments
constructed are of medium quality and range from $300-$500 per sq.
m. Luxury apartments cost US£1,200-$2,000, in a similar bracket to
HCMC.
Da Nang, Vung Tau, Phu Quoc Island
Major coastal areas like Da Nang, Vung Tau and Phu Quoc Island
are also seeing significant interest and development tied to the
growing tourism industry.
Da Nang is a major port and economic hub, advantageously
positioned between Ho Chi Minh City and Hanoi. Well known for its
pristine beaches and in close proximity to many historical and
UNESCO-listed world heritage sites, it attracts more than 1 million
visitors annually and expects to double this number by 2010. An
assortment of resorts is already located here, such as the
Intercontinental Da Nang Resort, positioned on the beautiful Son
Tra peninsula, only 20 minutes away from the city centre and
international airports. The Marble Mountains are an outstanding
cultural hotspot in the area with several Buddhist temples built
into caves within the summits. The five peaks are said to represent
the five elements of fire, wood, water, earth and metal and a great
deal of mystery surrounds the area which legend states contains
vast amounts of treasure. Another popular destination in the area
is China Beach which lies a few kilometres south of the city. This
area is famous for its action during the Vietnamese conflict as a
landing ground for Australian and American soldiers, and evidence
of the conflict is still visible along the beach. However its
lengthy white sands have made it a key tourist destination and
investors would do well to look into this area, with its leasing
opportunities both to tourists and expatriates in Da Nang. For
example, investors will soon be able to buy into the five-star
Furama resort in Da Nang which will have townhouses and villas for
sale.
Vung Tau has many sprawling beaches including Front Beach and
Back Beach and is popular with Vietnamese looking for weekend
getaways. The area is also very important in terms of Vietnam's
offshore oil industry and is the site of Vietnam's only petroleum
base. Large resort investments are springing up in Vung
Tau including the Saigon Atlantis, Vung Tau Aquarium and Bau Trung
theme park.
There are also plans to make Phu Quoc Island a major tourist and
economic hub by 2020, so this could be an area to watch. The island
currently draws in tourists to its beautiful beaches and is known
for its production of black pepper and fish sauce, while a pearl
farm was also recently established. The island is linked to the
mainland by ferries and there are plans underway for a new
international airport. With an average temperature of 27 degrees
and highs of 35 degrees in the months of April and May and golf and
casino complexes planned for the future, it is no wonder that
tourism is rapidly increasing on the island.
Nha Trang
Nha Trang is a coastal city on the South Central Coast of
Vietnam, world renowned for its sandy white beaches, seafood, scuba
diving and one of the world's most stunning bays. Despite receiving
copious investment, it still retains its relaxed charm. Linked to
the theme park on Bamboo Island by chairlift, it is popular with
backpackers and Vietnamese tourists alike. Set to double in
population by 2020, it is probably the fastest growing city in
terms of property development outside Hanoi and Ho Chi Minh City,
and would be a good place to invest. It is an area already
established as a good investment, and currently in planning stages
or under development are investment projects including 6
championship golf courses, a marina and yacht club, as well as
villa and apartment developments. Its selection as the site of the
Miss Universe pageant 2008 shows the growing international
popularity of the resort and will put it on the international
map.
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