All you need to know before buying properties in Vietnam

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All you need to know before buying properties in Vietnam

Update: 14:53:52 31-08-2018Date Submitted : 14:43:13 31-08-2018

Since the change of the Vietnam Housing Law in July 2015, the demand from foreign buyers for high end properties has surprisingly increased turning Vietnam to a new vibrant destination for real estate investment.

All you need to know before buying properties in Vietnam

However, in the first half of 2018, Vietnam real estate market has been facing with insufficient supply in the high-end apartment segment which is known to promisingly bring the highest return on investment thanks to multiple factors, causing difficulties for buyers in making decision on purchasing due to lack of options.
Even though the market offers high potential, it is still quite a young one regionally compared. Everything is still on its way to be formed. Understandably, foreign buyers need a clearer guidance especially on the housing law, a more transparent purchasing process, as well as more informative updates on the market to be able to have the confidence in making a purchase.
Going through this article will bring you the insights into this market, an overall picture of the economy of Vietnam as well as a decent guidance for foreigners on purchasing property in Vietnam. Additionally, there will be an up-to-date list of the top properties for sales in HCMC till the end of the year.

We will go through:

1. Economic overview
2. Market overview
3. Upcoming infrastructure in Ho Chi Minh city
4. How to make a purchase
5. HCMC Property portfolio 2018


Vietnam provides a vibrant backdrop for real estate investment as a dynamic and rapidly developing nation. The potential for Vietnam real estate appreciation is bolstered by strong economic fundamentals such as rising GDP, growing population, and large - scale infrastructure improvements. The key cities in Vietnam are Ho Chi Minh and Ha Noi.

Looking at the first half of 2018 economic overview, Vietnam has continued its strong GDPgrowth of 7.1% with an increase of 1.4% year over year which represents a strong indicator how well the economy is performing. Several local economists are surprised that Vietnam is continuing this strong growth into 2018 after a record year in 2017. 

Retails sales of $70 billion USD has been consistently strong as it demonstrates consumer confidence by the local Vietnamese in their own economy and their willingness to spend money. Retail sales has increased by 11% year over year. 

CPI (Consumer Price Index) is remaining steady at 3.3% and has decreased 0.9% in the first half of 2018 and expected to stay stable in the next few years.

The key driver of growth is the strength of FDI (foreign direct investment) into Vietnam. In 2017, registered FDI had a 44% increase over 2016, and that growth has continued into 2018. Most importantly, with dispersed capital growing at 8% per annum which represents the real cash coming into the county. The majority of which is going towards manufacturing but also real estate.

One of the key areas of focus for the government in Vietnam is the growth of the tourism market. As a result, the number of foreign visitors was at 7.9 million for the first half of 2018, which represents a 27% increase year over year. For the past 2 years, foreign visitors has increased on average of 30% year over year. In addition, domestic tourism is also growing very rapidly. The government has put effort in promoting the tourism industry and provided waver free program for certain nationalities. This results in the growth of many other sectors such as hospitality, F&B, retails, etc. all of which contribute to the growth of the overall economy.

Credit growth has been steady at 6.4%, slightly decreased by 0.8% year over year in the first half of the year.

In order to continue the growth story, the government recognizes the importance of investment into infrastructure. As such, it’s notable that Vietnam is investing in more in infrastructure as a percentage of GDP than any other countries in South East Asia. Manufacturing is the main benefactor of FDI at 39% while 27% goes towards real estate. The two areas which benefit the most from FDI are Ha Noi (29%) and Ho Chi Minh City (18%).


The supply demand dynamics in HCMC are extraordinary at the moment. Supply has dropped by 30% in the last 12 months while sales has increased by 22% in the same period. As a result, we had a strong absorption rate of 56%. In essense, there is considerable pent up demand for that added supply. 

Grade B has been the main driver of demand with an increase of 31% year over year. The new product trend which has been driving the market demand is projects located within 5 to 10 minutes’ drive to CBD, attractively priced, and have the factors that appeal buy-to-let investors.

The 3 best performing districts in Ho Chi Minh has been District 7 (18%), District 2 (17%), and District 8 (15%). All of which have benefit from improved infrastructure. 

Ho Chi Minh City has always been the most vibrant destination for all kinds of investment. Ho Chi Minh is Vietnam's commercial center and accounts for a large share of the national economy contributing to over 20% to the country's overall GDP, 25% of the total industrial production.

As of 2018, the population of HCMC has reached approximately 9 million registered residents. This number will steadily increase over the next few years.

From 2012 to 2020, the number of middle-income class has been expected to triple. Vietnam has a very young demographic with 70% of the population is under the age of 35. The increase in the middle class is actually helping the demand for housing because this young demographic is looking for a better lifestyle compared to what it's been offered from conventional housing - many generations living in the same house. From this new lifestyle, the young generation prefer moving out into these high rises that offers a full range amenities package. The culture shift has brought new demand for housing into the market.

A notable change in Vietnam apartment as a whole is that there has been a huge shift for owner occupation. The majority of buyers are occupiers, around 30% of buyers are investors, and very small portion are speculators (buy to flip in a short period of time) which means this is actually healthy for the market.

Aggregate from 2013 to 2017: Most of Grade A has been investors, followed by occupiers and speculators. Foreigners are more focused on Grade A and B. 


Ho Chi Minh city is always the top choice for investment among the whole country thanks to many factors:

Over the last 10 years, Ho Chi Minh city has been changing amazingly fast mainly thanks to the development of infrastructure. Many connecting bridges and roads have been built, together with the vibrant urbanization in some areas have brought a new modern appearance for the city.

Existing Infrastructure in HCMC
Saigon 2 Bridge (2013)
Dong Tay Avenue (2011)
Connecting Diamond Island (2018)
Thu Thiem Tunnel (2011)
Binh Loi Bridge (2013)
Phu My Hung Urban Area (2008)
Upcoming infrastructure in HCMC
Six lanes of Thu Thiem 2 Bridge connecting District 1 and District 2
Thu Thiem New Urban Area - The "Pudong" of Saigon
Widen Nguyen Tat Thanh street in District 4
Long Thanh International Airport
Metro Line system
Thu Thiem Bridge 3

The new Vietnam Residential Housing Law which has taken effect from 1 July 2015 has opened up the Vietnam real estate market to foreign ownership. 


Properties:  Residential properties (apartments and landed houses)
 30% of total units in one apartment development
10% of total landed project (villas and houses) in a landed project
or 250 landed property units in one administrative ward


What are the taxes involved?
A foreigner may either directly or authorize a third party (by power of attorney) to declare and pay Tax at a District level tax bureau at the District where the property is located.

Tax on Purchase:

Tax on Resales:
Tax on Leasing:
What are the Payment Schemes? 
Generally, for projects under construction, the payment scheme is decided by developers and agreed with purchasers. Housing laws limit the maximum collection before handover to be up to 70% for local Vietnamese developers, and up to 50% for foreign developers. The law also stipulates that 5% is to be collected upon issuance of the pink book. A default interest shall be applied as agreed in the SPA (commonly the default interest rate is at 1.5% per month of the late amount). If this violation exceeds the time given in the SPA, the developer has the right to unilaterally terminate the SPA and forfeit an amount. At a common practice, the forfeiture amount is roughly 20% to 30% of the apartment selling price.

What is the Handover Process? 
Upon the completion of the building, the developer shall serve a Handover Notice to the buyer to indicate the date of handover for the units and the outstanding amount to be paid before taking over the units. The buyer pays the outstanding amount as per the Handover Notice. On the handover date, the buyer will check the unit and take over the units by signing the Minutes of Handover. The buyer will also sign the application for a pink book, electricity, water, and telephone contracts with supplier at the handover date.

How do buyers find tenant? 
The owner can appoint Savills Vietnam to help lease out or resale their unit.

How do buyers collect Rental Income? 
The method of collecting rental income is a commercial decision agreeable by the landlord and tenant. Typically, the landlord will request 2 months of deposit. The landlord retains the right to instruct the management of the building to cut off water and electricity provision to the unit if the lessee fails to pay rent.

Step 1: Deposit for Desired Unit
Step 2: Sign deposit agreement upon receipt of deposit
Step 3: Visit Vietnam & open a local bank account
Step 4: Sign SPA (Sales & Purchase Agreement)
Step 5: Payment according to schedule
Step 6: Clients will be notified 2 weeks before handover
Step 7: Assist clients for hand-over & Leasing


Handover property (1 month):

Furnishing/Fitting out property (2-3 weeks): 
Finding tenants (1 month): 
Leasing (1 month): 
Maintenance (1 month): 


LANCASTER LINCOLN - A Sense of Manhattan


3. SERENITY - Sky villas in the heart of the city

  -40 floors + 5 basements
-6 floors podium _ 21 floors for office and commercial area 36 private suites at upper 10 stories
-1 penthouse



•      Location: An Phu, District 2
•      Traveling to CBD: 15 minutes
•      Amenities and facilities: international schools, future international sport center
•      Developer: Dat Xanh Group
•      Est. Average Price: 1,800 USD/ sqm
•      Project scale: 12 blocks with 3,175 units in total
•      Unit size: 1,2 and 3 bedroom units
•      Year of completion: 2020
•      Sales status: Refundable booking for Diamond Phase
•      Expected Launch Date: 23 September 2018
•      Foreign quota for foreigner

•   Gem Riverside is a 6.7 ha development with a water frontage along Giong Ong To River and Muong Kinh River in District 2. The development provides a wide range of recreational facilities and greenery. Gem Riverside promises to bring a fresh environment in harmony with nature’s beauty to its home owners.


•      Location: 90 Nguyen Huu Canh, Binh Thanh District
•      Travel time to CBD : 8 minutes
•      Amenities and facilities: International schools, international hospital, swimming pool, shophouses, spa, gym
•      Developer: Sunwah Group
•      Total area: 1.9 ha
•      Est. Average Price: USD6,000/sqm
•      Unit type: 2 Duplex Penthouse located on 46th & 47th floor of Golden House 4 Penthouse located on 46th and 47th floor of Golden House
•      Number of units: 6
•      Unit size: To be confirmed
•      Year of completion: Q4/2020
•      Handover condition: Bare shell
•      Sales status: Available foreign quota for penthouse

•      Developed by Sunwah Group (Hong Kong)
•      3 km to CBD area
•      View to Saigon River and CBD area
•      Within 1 km walk to metro station
•      Extensive facilities including shop houses, café, restaurants and resort-style swimming pool
•      Within close proximity to international school and hospital

•      Location: Thao Dien, District 2, HCMC
•      Travel time to CBD : 15 minutes
•      Amenities and facilities: international schools, spa, restaurant and clinics.
•      Developer: Thao Dien Investment
•      Est. Average Price: The last penthouse is starting from USD 782,000/ penthouse
•      Unit size: 392 sqm
•      Year of completion: Q4/2018
•      Sales status: Available the last penthouse
•      Foreign quota for foreigner