Property prices in Vietnam increased by 50 per cent on average in 2007, largely fuelled by investors shunning the stock markets in favour of the more gainful investment sectors.
In 2007 Vietnamese expatriates purchased property en-mass, creating an exponential hike in housing and land prices, prompting the Vietnamese government to draft new laws in a bid to curb soaring prices. In 2007 the estimated capital injection into the Vietnamese property market reached US$5bn, mainly foreign direct investment (FDI). 85 per cent of the FDI was pumped into the Ho Chi Minh City (HCMC) property development. Many districts within HCMC saw land prices increase 70-200 per cent.
At present only transfer taxes are payable on the sale of a property, but as most sales are paid in cash, making it difficult for the government to gage exact volumes and collect on capital gains tax.
Property prices in Hanoi and HCMC have tripled in the past year alone – especially in the luxury sector. In 2006 new apartments were sold for $80,000 but by the summer of 2007 this rose to a massive $240,000 in Hanoi.
However, according to market research just released by property company Obelisk, over 30 per cent of the group´s client-base favours the more accessible, transparent Eastern European markets, with many dismissing the notion of the new Asian markets. “Not one of our clients expressed interest in purchasing property in Vietnam, regardless of a 20-30 per cent growth rate forecast for 2008,” said Obelisk analyst James Gonzalez. “If foreign property investors are given full and complete ownership rights to property in Vietnam, the market will become much more flexible and therefore much more desirable.”
In 2007 Vietnamese expatriates purchased property en-mass, creating an exponential hike in housing and land prices, prompting the Vietnamese government to draft new laws in a bid to curb soaring prices. In 2007 the estimated capital injection into the Vietnamese property market reached US$5bn, mainly foreign direct investment (FDI). 85 per cent of the FDI was pumped into the Ho Chi Minh City (HCMC) property development. Many districts within HCMC saw land prices increase 70-200 per cent.
At present only transfer taxes are payable on the sale of a property, but as most sales are paid in cash, making it difficult for the government to gage exact volumes and collect on capital gains tax.
Property prices in Hanoi and HCMC have tripled in the past year alone – especially in the luxury sector. In 2006 new apartments were sold for $80,000 but by the summer of 2007 this rose to a massive $240,000 in Hanoi.
However, according to market research just released by property company Obelisk, over 30 per cent of the group´s client-base favours the more accessible, transparent Eastern European markets, with many dismissing the notion of the new Asian markets. “Not one of our clients expressed interest in purchasing property in Vietnam, regardless of a 20-30 per cent growth rate forecast for 2008,” said Obelisk analyst James Gonzalez. “If foreign property investors are given full and complete ownership rights to property in Vietnam, the market will become much more flexible and therefore much more desirable.”
by Robert Carry(Source: Property-report)
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