HANOI: Hundreds of property investors and wannabes fill a stuffy conference room in Cau Giay, a working-class suburb in Hanoi. “I love property!” they stand up and yell at one another with high fives. It is an exercise prompted by the coach, Welsh multi-millionaire property investor Kevin Green, to break the monotony of sitting down all day. “Yes, yes, yes,” they shout at this three-day real estate investment seminar, which costs more than US$400 per person – no small sum in Vietnam. Some flew all the way from Danang or Haiphong to learn the tricks of the trade. “A lot of the international practices taught here are still new in Vietnam. We should learn from them,” said Lien, an individual investor. “Interest rates have fallen so I think it’s more reasonable to invest now,” said Thuy, a businessman. Hieu, who is only 17 and a student, came with his mother. “Stocks could go up and down, but property, once you have it, it’s yours,” he said. Their sentiments are a snapshot of Vietnam’s property market revival. Unsold real estate inventory in November for the whole country was worth US$2.4bn, half what it was in early 2013. Low rent yields in Hanoi is one reason Nguyen Thi Phuong Lien is venturing out to Vinh Phuc province, where the Flamingo Resort sits on the banks of the scenic Dai Lai Lake. (Photo: Tan Qiuyi) A new law in July that opened up the market to foreign buyers also lifted confidence, if not actual sales to foreigners. “The problem we’ve got here is rental yield. The rents are too low – still too low compared with the purchase price of property. So we have to use special techniques to make it work,” Kevin Green said. Rental yields in Hanoi average five per cent for apartments, and less (3-4 per cent) for villas. That is one reason private investor Nguyen Thi Phuong Lien is venturing out to neighbouring Vinh Phuc province, where the Flamingo Resort sits on the banks of the scenic Dai Lai Lake. She bought a two-storey villa both for weekend family retreats, and to rent out as a holiday home. “I decided to buy this (property) because there is a shortage of five-star leisure properties around Hanoi,” she said. Banking on Vietnam’s growing middle class pockets, coupled with a thirst for country air, Lien is expecting a 20 per cent return on investment. Vietnam’s economic outlook is healthy: a six to seven per cent annual growth target till 2020, driven by foreign investment and a slew of free trade deals including the Trans-Pacific Partnership. But before its property market can become a serious regional contender for foreign money, Vietnam has some crucial housekeeping to do. “Like how you transfer money from other countries into Vietnam. For example, after a few years if you want to sell the property how do you take out the profits and money back to your country? We need some guidelines from the State Bank of Vietnam,” said Pham Thanh Hung of Cen Group Holdings Before that happens, real demand for property is limited to Vietnamese, but experts, including the Vietnam Real Estate Association, argued that alone is huge – and growing.
Despite a new law in early 2013 that opened up Danang ’s housing market to foreign buyers, domestic investors will be the main beneficiaries from the country’s huge opportunities in the housing market. Vietnam ’s unsold real estate inventory in November for the whole country was worth $ five per cent , Hundreds what it was in early 2013 . However, average yields are still comparatively low, and transferring capital and profits internationally remains unclear, with some calling for guidelines from Cau Giay . With the annual growth rate target a healthy 6%-7% till 2020, the burgeoning middle class is helping to revive the country’s housing market.