The historic coastal city is fast emerging as an up-and-coming area for investment.
By Romesh Navaratnarajah
New, more relaxed laws for foreign home ownership in Vietnam came into effect at the start of July 2015, and CBRE Vietnam expects the long-awaited changes to the Housing Law to trigger more interest from overseas buyers seeking mid- to high-end homes, as well as vacation or second homes.
Under the revised rules, foreigners with a valid visa can now purchase houses and apartments in Vietnam. Previously, only foreigners married to Vietnamese nationals and those making contributions to the country were allowed to buy property.
Overseas nationals will be allowed to own a maximum of 30 percent in any apartment building, or 250 houses per ward in the country. This 30 percent rule appears similar to that in Thailand where foreigners are permitted to own up to 49 percent of the space in any condominium in their own name.
Rosy outlook
Meanwhile, the country’s economy is progressing on the right track, with GDP growth reaching its highest level since 2010 in the first nine months of 2015 at 6.5 percent, due to the rebound in the property market since mid-2014, said JLL Research.
In fact, Vietnam’s condominium market achieved a new record of more than 10,000 units sold in Q2 this year.
Even though it is still early to predict capital gains, it is foreseeable that investors can enjoy a rental yield of eight percent in some high-end projects with good locations around Ho Chi Minh City, as opposed to four to six percent in Bangkok, and an even lower three percent in Singapore.
Although the two main cities of Hanoi and Ho Chi Minh City offer a range of investment opportunities with capital growth potential, it is Vietnam’s fourth largest city of Da Nang that is seeing a surge in construction activity, as the authorities look to transform it into a world-class tourist destination to rival the likes of Phuket and Bali.
The coastal city already benefits from having a 30 km stretch of sandy beaches, proximity to the ancient town of Hoi An (a UNESCO World Heritage Site), and championship golf courses designed by the pros.
Supply and demand
Around 1,300 units from 12 villa projects and 16,870 units from 15 apartment projects will enter Da Nang’s market from this year onwards, revealed Savills Vietnam in a Q1 2015 report. The property firm advises prospective buyers searching for luxury homes to explore the Son Tra district, which continues to have the largest future villa supply, while Hai Chau district will remain the top future apartment supplier.
The greater supply in the market is translating to higher prices. Savills noted that average villa prices in Q1 2015 were up 11 percent against the second half of last year. Similarly, the average price for apartments rose 17 percent from H2 2014.
Looking ahead, the report said, “The key factors that may affect buying decisions include the reputation of the developer, construction status, price and location.”
CITY FAST FACTS
(DA NANG)
• Population: Around one million
• Total area: 1,285 sq km
• Currency: Vietnam Dong
• GDP per capita: US$2,487 (2014)
• GDP growth: 6.5 percent (2015)
• Future transport: Da Nang-Quang Ngai expressway (due for completion in 2017)
• Home prices: Up 11 percent from H2 2014 (villas)
• Distance from Singapore: 1,697 km
INTERNATIONAL HIGHLIGHT – NEW PROJECT
The Point
Hoang Sa Truong Sa Road, Hoa Hai Ward, Ngu Hanh Son District
Type: Golf villa estate
Developer: VinaCapital
Tenure: 50-year leasehold (foreigners)
Facilities: Private beach, swimming pool, spa and gymnasium, beach club, tennis and golf course, restaurants and bar
Nearby Key Amenities: Non Nuoc Beach, UNESCO-listed Hoi An
Nearby Transport: Da Nang International Airport
Starting Price: US$286,000
The Point is the latest premier golf villa estate at the international award-winning Danang Beach Resort complex.
The project by VinaCapital consists of 40 luxury villas with sizes reaching about 3,110 sq ft. Phase one is fully sold and phase two is almost 90 percent sold out, with prices upwards of US$286,000.
All homes come with a private swimming pool and offer panoramic views of the Greg Norman designed Dunes golf course.
Owners and residents will also enjoy full access to the WhiteCaps Beach Club (swimming pool, tennis court, children’s area) and Danang Golf Club.
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