Hanoi expects to lure more foreign capital on its real estate market because the number of expats and foreign entrepreneurs working in the capital city is rising, according to Vietnam News Agency.Infrastructure and location attract foreign investors
Experts said that Hanoi’s western and northern zones are attractive to foreigners. Remarkably, the western area is hot spot attracting customers from South Korea, Japan, Malaysia, Singapore, etc. to buy or rent luxury apartments.
Nguyen Phuc Thanh, a veteran investor, explained that the western area accommodates the headquarters of many ministries, sectors and major domestic and foreign businesses. It is also home to key facilities such as the Vietnam National Convention Centre and the National Sports Complex.
Besides, transport infrastructure in the area is quite modern and stable, convenient for moving to inner city areas as well as main transport routes to other provinces and cities, Thanh added.
Hanoi’s real estate market lures foreign capital
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Meanwhile, the northern region is appealing to foreign investors, particularly in the mid-range and high-end segments. Nguyen Bich Trang, director of CBRE Hanoi, said that the north of Hanoi, even on the other end of the Nhat Tan Bridge, is developing strongly.
Talking about the reason for the attraction, the Director of CBRE Hanoi said that the northern real estate has the potential to develop more advanced segments than other regions because of geographical advantages. This area is considered as the "dragon’s head" of the capital.
Potential market
According to statistics, more than 82,000 foreigners are living and working in Vietnam. In particular, Hanoi is home to a large number of expats from South Korea, Japan, China, Singapore, Russia and the US.
According to a report by HSBC Vietnam, 29% of of expats working in the country said they were ready to spend their savings on home purchases, including high-end apartments and luxury property.
The revised law on housing, which took effect in 2015, has created more favorable conditions for foreigners to buy home in Vietnam. More open policies to attract foreign investment have also enhanced the attractiveness of Hanoi’s real estate.
In addition, in recent years, the policy of attracting foreign investment capital, including the policy of allowing foreigners to buy houses in Vietnam, has gradually been more open, attracting more foreigners’ investment to Hanoi’s real estate sector.
Experts said granting permission for foreigners to purchase housing is expected to encourage more types of real estate like investment, tourism and service property, which will benefit the economy.
Commenting on potential of real estate market in Hanoi, Chairman of Ciputra Group Budiarsa Sastrawinata said that Hanoi is one of Vietnam’s developing cities, so this is also a potential market, which is suitable for large investment projects in combination with the diversity of real estate types.
According to a report by the Ministry of Planning and Investment, in the first eight months of 2018, total foreign direct investment commitments were US$24.35 billion, up 4.2% over the same period of 2017.
Of the total, the real estate sector attracted US$5.9 billion, accounting for 24.2% of total registered investment capital, being the second most heavily invested among 17 sectors receiving foreign investment during the period. Hanoi attracted the most capital with the total registered capital of US$5.93 billion, accounting for 24.4% of total investment capital, the report said.
A recent major investment is a smart city project in Hai Boi and Vinh Ngoc communes of Dong Anh district. Implemented by Japan's Sumitomo and Vietnam's BRG Group, it has total investment of US$4.138 billion and is set to begin construction this October.
Deputy Minister of Construction Nguyen Van Sinh said Hanoi needs to identify the core issues to solve difficulties on the property market.
The city should adjust the structure of property products according to real demand and also continue to have incentives for enterprises, both domestic and foreign, which are involved in promoting sustainable development of the real estate market, Sinh stressed.
