Vietnam joined the World Trade Organization at the beginning of 2007 and since then, its economy has taken off. According to BloombergNews, Vietnam has gone from one of the poorest countries in the world to one of the world’s best performers. Even before many companies began shifting their product manufacturing from China to Vietnam due to recent US – China trade tensions, Vietnam posted +7.1 economic growth last year.
Local personal wealth in Vietnam is definitely in step with the nation’s financial growth. Knight Frank’s “The Wealth Report 2019” anticipates that the number of millionaires in Vietnam will grow +28% by 2023.
And where is all of this “new” money going? Real estate, both inside Vietnam and into international markets. Dung Duong, the senior director and national head of professional services with CBRE Vietnam, said, “Across Vietnam and particularly Ho Chi Minh City, high-end real estate has spurred a wave of local and overseas interest and investment.”
Inside Vietnam, local investors (as well as foreign investors) are going in Ho Chi Minh City’s District One where the Ho Chi Minh City Stock Exchange and Vietnam’s headquarters of international banks are located. Despite a smaller annual rental yield of 4-5% inside District One compared to 6-7% outside of District One, all buy-to-let investors are hoping to capitalize on the growing expat demand, according to Mansion Global’s Mercedes Hutton.
Beyond Ho Chi Minh City, affluent investors are going into “landed Properties” or detached, semi-detached and terraced housing. Coastal cities such as Da Nang, Nha Tranj and Phu Quoc, are also attracting investment resources in hopes of benefitting from “…the nation’s fast-growing tourism industry,” according to Pritest Samuel, senior editor for Asia briefing with Dezan Shir and Associates.
Ultra nigh-net-worth Vietnamese are also attracted to investments in English-speaking countries like the US, Canada, the UK and Australia. These countries are seen as offering “the best educational opportunities and investment potential,” said Dung Duong, senior Director and national head of professional services with CBRE Vietnam.
Troy Griffits, deity managing director of Savills Vietnam, explained that Vietnam’s buyers can invest in US citizenship via investment programs such as the US’s EB-5 visa program that allows “…immigrant investors to become permanent residents (of the US) by investing at least $500,000 (although soon to become $900,000 on November 21 2019).” Because the EB-5 program places no restrictions on where investors can buy properties, many Vietnamese investors are drawn to states with already existing Vietnamese communities such as New York, Washington DC and in Canada.”
Griffits went on to say that Vietnamese investors frequently choose townhouses and villas as well as under-construction projects when making offshore US investments.
Vietnam’s economic surge and Vietnamese personal wealth are expected to grow. According to a recent “Economic Insight: Southeast Asia Report” compiled by the Institute of Chartered Accountants in England and Wales, Vietnam’s economy is expected to grow +6.7% this year, the fastest rate in Southeast Asia. Agents here in this country would be wise to invest some of their expertise, skill, networking time and international thinking into Vietnamese connections they may already have.