New housing law triggers market stir

New housing law triggers market stir

Posted: 10 May 2015 09:50 PM PDT

VietNamNet Bridge – Real estate developers are anticipating the implementation of the Law on Housing which opens more rights for foreigners to own property in Vietnam this July. Deputy managing director of Savills Vietnam Troy Griffiths has a look at the proposals.

Real estate developers are actively preparing to sell housing to foreigners from this July when the revised law on housing comes into force. Developers are obviously ready now as the products will initially be the same as offered to domestic buyers. Depending on the level of interest from foreigners, there may be changes to cater for offshore investors. An example of this may be to offer terms that suit investors more than occupiers, such as guaranteed returns.

Foreign developers, however, already have their sales channels in place and can move to the market quickly. Local developers will need to have a good sales strategy and either align with good marketers or go direct themselves to these foreign markets. This is all contingent on the amendments allowing foreign investment as contemplated.

While welcoming the decree on increased foreign ownership rights, Troy Griffiths argues the devil is in the details

In conjunction with our regional offices, Savills is already planning to host several events. One of the key issues now is having sufficient quality stock to provide investors with a good choice.

Regarding the type of products which would be most attractive to foreigners, I think it will be the broader-based investment product.

Many of our neighbouring countries have record low deposit rates, so if Vietnam offers a product that has reasonable yields then this will be very attractive.

There will be variations around this theme as some areas will also provide capital growth, thereby enhancing total returns in Vietnam. Other regional markets have had restrictions in policy as well as soft economic conditions weakening their residential markets. This together with low performance by cash and other asset classes should see a flight to Vietnamese property with good total returns.

The key markets will be those that have mature trading as well as access to the larger populations with investment potential. We see these markets as primarily Singapore and Hong Kong. Recently there have been very successful project sales in Cambodia and Myanmar that have marketed investment products. Generally these are smaller more affordable apartments with some sort of guaranteed return. Historically, developers have aimed for the end-user market, catering to the ultimate occupants. However, for investors they will care more about the potential to rent and receive a yield. This may change the focus to better locations, higher density districts and those with emerging capital growth potential.

Recently, we have seen some agencies from abroad coming to Vietnam to introduce their products. I think this could be a good option. Provided Vietnam’s amended laws support purchasers’ rights, then this will certainly work. It has worked extremely well in other locations. This is why the flight of investment capital has continued from Asia into Australia and the UK. Fundamentally it’s the transparency and enforceability of title and rights that purchasers are seeking.

For example, in 2014 a single residential agent in our Savills Taiwan office brought over 80 residential investment sales into Australia.

However, this is a competitive market with purchasers having a number of good choices available within the region, so the product will need to be priced and delivered against this backdrop.

On the attractiveness of the revised law for foreigners to buy houses in Vietnam, let us see how the decrees and circulars guide the amendments. It would be premature to comment prior to these being circulated. We are very happy that the government continues to provide policies that assist property development.

If the guiding decrees effectively limit the foreigner purchasers to those that are working in Vietnam then the impact would be very limited.

However if the amendment permitted ‘golden visas’ or investment then there would be strong demand. The next step to be contemplated is the ‘exit’. If there is potential for foreign investment then competing countries would also offer depreciation allowances to be offset against income for tax. There would also need to be a solid capital gains taxation regime and a clear pathway for repatriation of dividends.

In the coming time, if we look to mature markets with relaxed foreign ownership then usually no greater than 5 per cent annually of all transactions are to foreigners.

I expect the government to offer a support policy to assist the residential sector; however there will be strong parallel guidance through visas, tax and dividend remittances etc.

Amongst our regional peers, the Malaysia My Second Home programme is hugely successful and has been running for over 15 years, however there has not been a massive influx of any single foreign nation, nor have there been adverse effects. To the contrary, the scheme has worked very well, actively attracting foreign capital to Malaysia.

VIR

Local authorities keep stern treatment for pending coastal tourism projects | Look At Vietnam - Vietnam news daily update

Local authorities keep stern treatment for pending coastal tourism projects

November 12, 2011 about News, Travel

LookAtVietnam - Gone are the days when the local provincial try to
attract tourism projects at any costs. They have become much choosier in
selecting investors and approving projects.

A lot of investors have been rushing to Binh Dinh and Binh Thuan provinces to
register resort and tourism complex projects on the coastal areas. Even the
investors, who do not have financial capability, also registered projects to get
land allocated.
Binh Dinh has a 134 kilometer coastal line and a lot of beautiful landscapes
which are the wonderful conditions for developing tourism and entertainment
services.
In order to take full advantage of the heaven-sent conditions, the provincial
authorities built a coastal road that links Hoai Nhon district and Quy Nhon
City. They hope that the Nhon Hoi Economic Zone, the wonderful natural
conditions and the favorable transport infrastructure, will facilitate the
strong development of the tourism industry.
Therefore, it is understandable why investors have been flocking to the central
province. To date, investors have registered 9 tourism projects on the costal
areas with the total registered capital of 15,402 billion dong.
However, the provincial authorities are considering revoking investment licenses
from the investors who really do not have capability to implement projects.
The Nhon Hoi trade, service and tourism complex project, licensed in November
2006, remains a “pending” project.
At first, the project was expected to cover an area of 74.6 hectares, but later,
the project’s area has been raised to 94 hectares. The 181.2 billion dong
project was to be implemented in 2007-2012. To date, 71.16 hectares of “clean
land” (the land ready for construction after the site clearance work completed)
have been allocated to the investor. By May 2011, the total construction work
volume has reached 82.2 billion dong.
However, according to the provincial authorities, though the project is located
on an advantageous position, the scale and the architecture of the project do
not commensurate with the “golden land” position. Meanwhile, the investor proves
to be unprofessional and does not follow the current laws in the investment.
Rainbow Resort project also got the investment license five years ago, in
December 2006, but no considerable improvement has been made so far. The 390
billion dong project, which was expected to cover an area of 56 hectares and
implemented during five years, from 2009 to 2014, has been going too slowly. To
date, the value of the construction works had been 5.58 billion dong only.
The investor has been also found out as unprofessional, who cannot fulfill his
commitments.
Similarly, the projects on Vinh Hoi tourism complex and resort, Linh Phong
pagoda eco-tourism project, Hai Giang tourism complex all have been going very
slowly due to the problems in the site clearance. The Emerald of Vietnam project
developed by ALT tourism development company has made no move over the last
year, since the investor still needs to negotiate with the South Korean Gold
Star on the mine disarming works in 2011.



more info ---->>> Local authorities keep stern treatment for pending coastal tourism projects | Look At Vietnam - Vietnam news daily update

Dubai property crash stuns holiday home investors-26 May, 2009

DUBAI – The UK Daily Telegraph has a revealing story about the state of the property market in the UAE.

The newspaper reports that an 800-strong group of mainly UK expat investors, from individuals who put deposits on holiday flats to property brokers, claim hundreds of millions of pounds is at risk.

Work has slowed or stopped on swathes of building sites, including on a second "Palm Island". The city was planning a series of artificial peninsulas in the shape of palm trees packed with seafront holiday villas, but only one is finished.

Of all the world's property crashes, says the Telegraph, Dubai's has been among the most spectacular.

According to an estimate from Morgan Stanley, projects worth £165 billion have been delayed or cancelled across the United Arab Emirates.

Prices in Dubai have fallen by more than 40 per cent since September.

As prices soared, many investors bought off-plan, either because it was cheaper, in the case of small-time buyers looking for a home in the sun, or because they could "flip" or sell on for a quick profit without ever having to pay the full value.

Investors on the end of a chain of "flippers" have been hit particularly hard as prices fell while building was put on hold. But even those who bought from developers now face the dilemma of whether to keep paying or cut their losses.

The situation has been made worse by local authorities which are revising rules on repaying money for property bought "off-plan" which could mean investors cannot get their full investment back.

The Dubai Real Estate Regulatory Authority (RERA) has drafted new rules under which investors who pull out of contracts are refunded on a sliding scale, depending on how much has been built.

But developers are still entitled to 30 per cent of the money paid even if nothing has been built at all, giving them an incentive to claim projects are still viable.

RERA is preparing further revisions. It may also order 27 projects to be cancelled with full refunds – if the money is left.

Alexis Waller, a lawyer at the Dubai offices of legal firm Clyde and Co, told the Telegraph that many investors signed contracts which did not specify what would be built when.

"Investors signed up to payment schedules that were in no way linked to milestones," she said. "That's how the market worked here, and purchasers didn't query it because they were making so much money from property.

“It's become an issue because they are no longer making money."

Source: Daily Telegraph, London



Dubai property crash stuns holiday home investors-26 May, 2009

Discovering charming Phu Yen

Phu Yen is naturally endowed with a nearly 200km coastline and a great many gulfs, lagoons, beaches and islets. The province also has rivers, mountains, lakes, hot spa areas and valuable tangible and intangible cultural heritage sites.
Da Bia Mountain, a tourist site in Phu Yen Province.
These are ideal conditions for the province’s tourism industry to take off. Coming to the province, visitors will have a chance to get close to nature and discover the distinctive culture of the people of Phu Yen.
With its enormous potential, Phu Yen has become the first option for many domestic and foreign investors. The province has thus far attracted many big tourism investment projects.
Since 2005, the Phu Yen province People’s Committee has licenced 35 tourism investment projects that cover more than 1,640ha and cost some VND5.1 trillion and US$5 billion, some of which have become operational.
There is the La Perla Tashun Company’s US$10 million Bai Tram Hideaway Resort in Song Cau district that covers more than 89ha.
Located on a sand hill and backed by a mountain range looking out onto the open sea, Bai Tram has an arc-shaped beach that is very romantic. By 2010 the resort is to have 167 available five-star rooms with infrastructure facilities to international standards.
When it is completed, Bai Tram Hideaway Resort will become an entertainment chain of beach facilities, hillside villas, French-style villas, entertainment and sports areas and a convention centre. The first phase of construction has been completed and some deluxe suites are being used under test conditions.
The chairman of the Phu Yen province People’s Committee, Pham Ngoc Chi, said that after Bai Tram Hideaway Resort is completed, a number of other top-of-the-line resort projects are to get underway.
In Tuy An district, in the city of Tuy Hoa, a US$4.3 billion Phu Yen hi-end tourism chain will be built that is to cover 565ha. This will be the biggest tourism project in Vietnam.
Other significant projects are ’Mini City’, a top-of the-line resort costing US$550 million that covers 300ha, the US$35 million Long Beach Resort on 8ha, the US$30 million Sao Viet Ecological Resort on over 68.4ha, US$31 million Phuong Phu Gia compound chain on 8ha, and the more than US$10 million Thuan Thao Resort on over 10ha.
In Song Cau district will be the US$5.6 million Bai Nom Ecological Resort on over 30ha, and another associated with Long Hai Resort costing US$3 million over 8.2ha.
Phu Hoa and Dong Xuan districts have attracted the US$50 million Green Resort on over 125ha and the Triem Duc hot spa site costing US$30 million over 50ha.
To effectively exploit its potential for tourism development, the Phu Yen Communist Party Committee enacted Resolution 77-KL/TU dated April 28, 2008 to confirm its determination to develop tourism. Accordingly, tourism will be turned into a spearhead economic sector with rapid and sustainable growth.
The number of visitors coming to the province is expected to increase 35 percent per year from 2006-2010 and by 2010 the province is to receive around 360,000 visitors, the number of foreign visitors increasing 53 percent per year.
On August 29, 2008, the Prime Minister enacted Decision 122/2008/QD-TTg to approve Phu Yen province’s socio-economic development master plan until 2020.
By 2020 the province will need VND238 trillion in investment capital to turn it into a major tourism and service centre in the region and the country, a new eastern gateway to ignite development in the Central Highlands and inter-regional development between the Central Highlands and central coastal areas.
Phu Yen tourism is expected to take off with the big money investment projects. If travel agencies join hands to offer combined tour packages to destinations in Phu Yen and some outlying locations like Khanh Hoa province and Ho Chi Minh City where picturesque landscapes that are associated with romantic legends exist, Phu Yen would become a magnet for visitors in the near future.
With close cooperation with other central coastal provinces and Ho Chi Minh City, Phu Yen could be part of the program ’The world heritage road over the central region’.
The province’s tourism industry will have a bright future once these big investment projects get underway.
(Source: VNE)

Vietnam economy faces storm, foreign business groups warn

Worried foreign business groups warned yesterday that Vietnam, a darling of foreign investors until a year ago, now faces "a perfect storm" of challenges amid the global economic turmoil.
The communist government must drive forward long-stalled reforms or risk dropping further behind its Asian competitors, major foreign chambers of commerce warned at the Vietnam Business Forum (VBF) conference in Hanoi.
"Economic news across the world is almost uniformly bad," said Michael Pease, chairman of the American Chamber of Commerce in Vietnam.
"The availability of debt and equity for investment into Vietnam has shrunk dramatically over the past few months. There is entrenched pessimism about the prospects of many announced projects moving forward to completion."
Lawyer Fred Burke, delivering the VBF report on the crucial manufacturing sector, warned that Vietnam's manufacturing sector was just beginning to feel the effects of the global financial meltdown.

"Based on an export-led growth model, our manufacturers and other exporters are confronting a 'perfect storm' of external challenges," he told the group of several hundred business and Vietnamese government officials.
Key threats for the developing economy, he said, included a drastic drop in demand in major export markets for manufactured goods and plummeting world prices of commodities and crude oil, which Vietnam exports.
"The furniture and electronics industries have been the first hit, but even garments and footwear and sea products cannot be far behind as global demand continues to weaken," said Burke, of law firm Baker and McKenzie.
Burke warned of the risk of "serious foreign exchange shortages" in coming months as foreign investment projects are delayed or cancelled, tourism drops off and overseas Vietnamese workers send home less money.