Stuff I've talked about here recently has been appearing the news in the last few days so I wanted to point it out for you.
As this article says:
When Phu My Hung company rolled out 40 new deluxe apartments, each worth around VND3 billion (US$187,000), in district 7’s Saigon South urban area last month, some 1,000 customers queued up to register despite the fact that prices had soared by 50 percent in the last few months.
From the same article:
Land sold by TS real estate company, also in Saigon South, fetched VND19 million ($1,187) per sq.m, up from VND12 million ($749) just two weeks ago.
Ha - up over $400 per sq.m in two weeks? What's going on! I talked about all this land being developed in this post in which recent commenter Ching tells me that the whole area was bought by LG. Jesus.
Also in the last few days, Thanh Nien wrote this story which I brushed upon in The Final Word in 'Saigon in 2020'. Looks like my premonitions may partly become reality. They say:
Construction of the 19.7 km (12 mile) track linking Vietnam's largest city and the neighboring province of Binh Duong, known as the Ben Thanh – Suoi Tien route, was expected to start later this year or early in 2008 and finish in 2013, city transport officials said.
Sadly, I will be waiting for any signs of said construction site, Canon at the ready.
Other News: The 'N' on my laptop keyboard has fallen off, exposing the plastic node beneath it, which is surprisingly hard to press. You have get it right on the top. Amazing how many words have N in them.
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11 comments:
I have to say that I've been reading your blog lately and I'm dying to go back (1st time May 06) to Saigon. Not sure when but when I can take a long break from work I'm heading back.
But reading about the real estate in Saigon. It sounds very booming, but my question to you if you know the answer is who can afford $187,000 apartment in Vietnam? I wonder if I can get one, but from what I hear it not likely that a U.S. can buy real estate. Do you know?
Oh yeah, reading about your wedding was interesting in a good way.
Michael, foreigners in Nam can't own property.
In answer to your question 'who can afford a $187,000 apartment', I would say loads of people can afford it. There are plenty of rich Vietnamese, or those funded by wealthy relatives abroad. I wonder why spend that money when it's obviously a bubble that will burst -- if you saw the prices of apartments in other areas of the city, you'd laugh.
I forgot about the Viet-Kieu. But I never imagine anyone in Vietnam spending that much money. I guess when I was their in May 2006 I went to the wrong section of town to look around. It's just unbelievable spending that much, even though my dad will be returning to the U.S. on Monday to take some cash back to buy a house in my brother/sister neighborhood for $20,000.
Thanks for the response and can't wait to see what else you have to share about Vietnam.
It is a bubble that will burst; happened in BKK. If I had 187,00 to blow, I'd want to get my hands on a chunk of land, not an apartment.
plus one zero ;)
From my understanding and what I hear. You (Vietnamese) can buy a house but you don't own the land that it stands on. Is that right, Jon?
Michael,
I would like to add that there are currently two mechanism by which a foreigner can buy property. Firstly you can set up a limited liability company in Vietnam and hold 30% of the shares and have the company purchase the property. This will allow you be the signatory on the land use rights( so hong) as a representative of the company which in turn will give you the rights to transfer the property. The second way is to buy the property as a 99 year freehold lease.. meaning you will pay for the lease of the property to 99 years up front. Your name will not be on the land use rights but you have a lien on the property. This is being implemented in Phu My Hung, although the legality of this method has not been tested by the land courts. The disadvantage is that your property can not be mortgaged outside of the PMH finance operations. It is uncertain the transferability of the property without the approval of PMH.
Lastly, the "official" mechanism this thru the the Department of State of Vietnam. If they have to included you in the master list of people with strategic talents( ie. rich people, scientist, industry leaders) that they would like to offer the property rights as an incentive to returning to redevelop the country.. So far less than 100 people have actually taken this initiative.
As for the comments about the current market price of property. It is not overinflated because demand if greater than supply. This intentional on the government perspective because of the current real estate tax structure. Real estate has only a transaction tax of 4% for land and 1% for building. this is irrespective if there is capital gains or loss on the property. Increasing transaction price generates increasing tax revenue. High price of land is beneficial to vietnamese partners of high rise projects, in which they only contribute the LUR. The higher the land price, the greater the share in the venture. Therefore, the current price is the market price because it is the controlled by the government. It is projected to increase by at least 10% a year to compensate internal inflation( government printing of money) and external ( Viet Kieu sending dollars home). I hope that answer some reader question.
Again michael, i really enjoy your post.. glad that you sharing the excitement about vietnam.
Um yeah, this is off topic but would you and your wife like to join us for dinner at Zen Plaza (sushi bar) tonight at 7 pm (Sunday 15th)??? The more the merrier :-).
Hi Guys.
Firstly, micheal, I think all your questions have been answered right there....by someone who knows what they're talking about! They didn't identify themselves but from the gist of it, it is possible to own land as a foreigner, but it ain't easy! The way to get around it is marry a Vietnamese girl like I did ;).
It is also true that although you can buy and sell land, the ownership belongs to the government. This means that when they need to build a bridge or widen a road, people don't have much say in the matter.
Annie, like I said, we just got back from a long weekend! Have to give it a miss this time but thanks...hehe.
Jon, so if you marry a Vietnamese you automatically become a Vietnamese citizen?
Ha - absolutely not. My status remains the same as a two week backpacker. However, it means that I could purchase land in my wifes names...and other things...like start a business.
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