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(Yicai Global) Feb. 13 -- Chinese investors have surpassed locals to become the biggest group of property buyers in the capital city of Vietnam, while betting on valuations to go up amid the globalizing landscape of manufacturing.
Chinese mainland citizens made up 31 percent of all real estate investors in Ho Chi Minh last year, property services firm CBRE Group said in its latest report. This group accounted for 4 percent of overseas buyers in 2017.
Chinese buyers tend to invest in high-end housing projects in big Vietnamese cities such as Ho Chi Minh and Hanoi, Chinese newspaper the 21st Century Business Herald reported today. Some also consider low-end apartments around industrial parks due to the growing number of Chinese firms settling in Vietnam.
Chinese buyers often compare Vietnam with old-time Shanghai when buying properties, hoping to profit from the appreciation of prices, said Stephen Wyatt, the head of global property firm Jones Lang LaSalle's Vietnamese unit, said to the newspaper.
Multinationals will transfer their supply chains to Vietnam, Malaysia and other countries with mature manufacturing capabilities, a director of Chinese real estate site Juwai.Com told the 21st Century Business Herald, adding that Vietnam will become a popular destination to set up factories, which will improve the infrastructure.
The government is also offering policy support. Vietnam issued a new housing law in July 2015, under which developers can sell 30 percent of the units in each building to foreigners with valid resident visas and offshore firms.
About 35,000 high-end apartments with a price of over USD1,500 per square meter in Ho Chi Minh were offered for sale from 2015 to 2017, according to property services firm CBRE Group. The prices of villas and townhouses rose by 13.6 percent from two years before that, when less than 10,000 units were for sale. The average price of apartments in Ho Chi Minh City has risen to CNY15,000 (USD2,220) per square meter, and some high-end luxury houses are valued from CNY60,000 to CNY70,000 per square meter.
Robust economic growth, rapid urbanization, large young population and an increasing middle class in Vietnam has promoted a demand for high-quality life, work and entertainment venues, said Chen Lian Pang, the chief executive of Capitaland Vietnam, told the newspaper. Vietnam's per capita gross domestic product rose seven times from USD388 in 2000 to USD2,600 last year.
Editor: Emmi Laine