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

Hanoi Real Estate

Hanoi realty market not ripe for investors

April 22, 2012

This is not
the right time for secondary investors to join the present dreary realty
market as the central bank’s latest loosened credit policy will bring
about a psychological impact only, insist market observers.

Prices continue shrinking

Since realty fever in 2007, the condo segment for the first time has
experienced a free-fall in price in the primary market, said an
executive of CB Richard Ellis Vietnam (CBRE) at a recent press briefing
relating to real estate in the capital city. Around 53% of
newly-launched apartments in the first quarter were priced at below
VND21 million per square meter at favorable locations like My Dinh, Dinh
Cong and Cau Giay urban area.
Meanwhile, prices of housing products in the secondary market have
still continued on a  downtrend, at around 11% year-on-year. The
presence of a meager 1,100 flats as new products on the market this
quarter proved that not only homebuyers but also enterprises and
developers are sticking to a ‘wait-and-see’ attitude, noted CBRE
executive director Richard Leech.
Notably, several project owners are tending to prolong or even halt
construction progress in spite of good business with other projects.
Statistics by Savills Vietnam also recorded the deepest price plunge
of the medium-cost apartment segment this quarter, at 9%, compared to
the last quarter in 2011. The fact showed that prices of all segments in
the secondary market were falling in most districts on average. The
leading property services provider attributed the price fall to low
liquidity of the market since the middle of last year.

Poor liquidity

A lot of experts predicted 2012 would be the year of the
middle-priced apartment sector. However, data collected by Savills
Vietnam in the first quarter indicated the consumption ratio of grade-B
flats, or middle-priced products, stayed at 3%, down nine percentage
points from the previous quarter. Similarly, grade-A condos, or
high-class apartments, saw transactions reach 2% during the first three
months, thus no change from the preceding three quarters.
The combined consumption ratio of the whole market stood at 7%,
sliding by five percentage points against the fourth quarter in 2011.
According to Savills Vietnam, the local market will see a new supply
of roughly 45,000 flats from 52 projects in the next three years. This
will put much greater pressure on the sluggish realty market, especially
as the number of unsold housing products by Hanoi’s investors is fairly
large, at about 16,500, as reported by CBRE.
Most specialists shared the view that the current stagnant market had
resulted from increasingly-rising misconducts of developers and
investors in terms of construction progress and legal procedures,
seriously dampening confidence among consumers. Due to financial
constraints, the absence of speculators accounting for up to 60-70% of
the total demand was also cited as the reason behind the weak liquidity
of the market.
A series of disputes between developers and homebuyers in recent
times have also discouraged local buyers from looking for apartments
developed by project owners.
The market has showed some signs of improvement with a slight
recovery after being frozen for a long time, reckoned Pham Trung Ha,
director of property company Hoa Phat.
The ceiling deposit rate was revised down to 12% a year but high
lending rates plus concerns over dull outlooks and the maximum credit
growth rate of 17% annually at banks as required by the central bank
have led to a poor appetite for property loans among lenders. Therefore,
project owners and those wanting to buy homes to live in have found it
hard to access bank loans.

Not right time for secondary investors

Regarding the ample housing supply in Hanoi, Leech of CBRE said this
was a good time for those in dire need of housing, not for either
secondary investors or speculators, but to buy homes to live in.
Borrowers taking out bank loans are still charged with unaffordable
lending rates, so the lowered deposit rate cap is aimed at reviving the
psychology of house buyers only.
To increase liquidity for the real estate market, experts advised
local firms to pay attention to the total area of every condo, prices as
well as quality and flexible payment methods in line with clients’
demands.
Local industry insiders have difficulty identifying consumers’
demands, so they are unable to match supply and demand at home as
expected, Tran Nhu Trung of Savills Vietnam added.
SGT

Multi-millionaire sues gov’t over villas, loses

May 11, 2011 about Business, News

VietNamNet Bridge - One of Vietnam’s richest people has lost a lawsuit against the Lam Dong Province Finance Department over a property dispute.

Mr. Doan Nguyen Duc

Lam Dong Province People’s Court yesterday rejected Hoang Anh Gia Lai Group’s lawsuit against the provincial Finance Department over some leased villas in Da Lat City.
The first instance court concluded that the group did not meet the progress of developing the leased properties as stipulated in the contract signed with the Department.
Meanwhile, Doan Nguyen Duc, the multi-millionaire owner of Hoang Anh Gia Lai, alleged that the Department partially violated the contract.
Duc claimed that the Finance Department unilaterally terminated Contract No. 818 it signed with Hoang Anh Gia Lai group on March 25, 2008.
Under this Contract, the Department leased 20 villas to the group on Pho Duc Chinh, Nguyen Du and Quang Trung Streets in the province’s Da Lat City for a term of 50 years starting 2007.
Hoang Anh Gia Lai said that after signing the contract, it repaired 8 villas and put them into use with a total area of 24,000 square meters.
The group spent VND974 million (US$47,300) on site clearance and compensation, at the request of the provincial authorities.
However, on October 29, 2010, the Provincial People’s Committee issued a decision to withdraw 18 villas from Hoang Anh Gia Lai to assign them to Trung Thuy Group.
Duc said the decision was just a unilateral and unlawful decision from the authorities, not a case of force majeure as stated in the contract.
Duc said he did not agree to the authorities’ statement that the withdrawal was made based on the fact that the group had not used the leased villas within 12 months from the date of receipt of them.
He also rejected the Department’s allegation that the group had let the properties to deteriorate after lease.
Hoang Anh Gia Lai to appeal
Meanwhile, the court said that before issuing the decision on withdrawal of the properties, the Department had repeatedly urged the group to use them but the group failed to do so.
In many meetings with the department, the group showed non-cooperation or refused to sign on the meetings’ minutes, the court said.
The fact that Hoang Anh Gia Lai left the leased properties unused or unrepaired violated the province’s regulations on leasing villas promulgated in 2005, the court said.
It also judged that the department would have to repay the group the expenses the group had spent on repairing 8 of the 20 villas.
Although these regulations were not officially stated in the contract, Hoang Anh Gia Lai, as a property investor, could not say that it did not know such regulations, the court said.
The withdrawal of the villas by the department was because the investor – Hoang Anh Gia Lai – had violated the lease contract, the court concluded.
Therefore, the court decided to reject the group’s lawsuit against the Lam Dong finance department.
Duc told VnExpress that this judgment was not a final one and he would lodge an appeal to the Appeal Court this week.
Doan Nguyen Duc, chairman of the Hoang Anh Gia Lai Group, was born in 1962 in Nhon My commune, An Nhon District, Binh Dinh province.
He has been well known as a successful entrepreneur with the famous brand Hoang Anh Gia Lai as well as a “big boss” in the world of football.
After failing three university exams, Duc passed in his fourth attempt at the University of Agriculture and Forestry. However, he left the school after one year of studies to become a businessman when he was 22.
He started with a small woodwork factory that provided tables and chairs for students in his native commune. He later expanded his business into manufacturing furniture and then some other fields.
Since 1990, he has been chairman of Hoang Anh Gia Lai Group, which specializes in various fields, including plantation and timber processing, growing and processing of rubber, production of granite, etc.
Since 2001, he has been yearly spending VND10 billion (US$485,000) on football and his Hoang Anh Gia Lai football team became the team that has twice won the V-League championship.
A few years later, the group expanded its business lines in other fields like tourism and real estate.
In 2008, Duc was the richest people on the stock exchange of Vietnam.
He is considered the first Vietnamese who has owned a private plane.
As of November 20, 2010, total capital of Hoang Anh Gia Lai was over VND22,500 billion (US$1.09 billion), of which Duc owned 50.1 percent.
He is now among the richest people in Vietnam.
Source: Tuoi Tre

Ha Noi set to demolish 550 ‘super skinny” residences | Look At Vietnam - Vietnam news daily update

LookAtVietnam -
Ha Noi authorities say they are determined to wipe out a total
550 deformed and super-slim houses in the city this year.

Deformed and super skinny houses along Ha Noi’s Dao Tan Street. The city is determined to demolish houses like these as they potentially pose a threat to local people and disfigure the urban environment. (Photo: VNS)

Deputy
Chairman of the municipal People’s Committee Phi Thai Binh has asked districts
to prepare plans to do this and submit them to city authorities for approval
before April 30.

“With strong instructions from the committee, the city will have no more super-slim
houses by October or not later than the end of this year,” said deputy director
of the Ha Noi Construction Department Nguyen Khac Tho.

The
decision to tackle the issue does not concern the tens of thousands of thin
houses that have become a feature of Vietnamese architecture in recent years.
While strange and unappealing to foreign eyes, these buildings have grown from
three to four metre wide village houses.

The Law on Construction, which became effective in 2004, stipulated that land plots
smaller than 15sq.m should not be built. But many small houses were built in
preceding years, some of them so skinny it is hard to believe people live in
them.

To promote the law, the city issued Decision 26 in 2005 on guidelines to eliminate
deformed and super skinny houses - and pay compensation for those destroyed.
decision permitted district People’s Committees to withdraw land plots of under
20sq.m or plots above 20sq.m with odd or deformed shapes. It had the power to
integrate them into a bigger block for public use.

However, the decision was not strictly executed. To make matters worse, the number of
super-slim and deformed houses has risen to 553, of which 186 were built after
Decision 26 was issued.

“The actual figure could be higher,” said Tho. “This proves that district authorities
haven’t done their duty.”

The weakness of local construction inspectors and authorities have been given as
reasons for the problem.

VietNamNet/Viet
Nam News

Hanoi real estate investors marching towards the central region | Look At Vietnam - Vietnam news daily update

VietNamNet Bridge – As real estate prices in Hanoi become “toweringly high”, many
investors in Hanoi think that they should no longer limit themselves to local
investments, and Da Nang in the central region has become their new destination.

Though the
price of land in Da Nang has been escalating, the city remains an attractive
location for real estate investors. The coastal villas and coastal land plots
along the “golden” land strip of Son Tra-Dien Ngoc that links Da Nang and Cua
Dai sea in Quang Nam province are being hunted by the wealthiest millionaires.

Coastal
land areas attract investors

An officer
at Cuong Hung Thinh real estate trading floor, one of the biggest trading floors
in Da Nang, said that the small land plots in the coastal areas and along Han
River have been attracting many investors, especially from Hanoi. The investors
are drawn to the high profitability from the land, about 30 percent after three
quarters of investment.

Nguyen Thi
A, who lives on Le Trong Tan street in Hanoi, related that in late April 2010,
she purchased a plot of land for a big project on the east bank of Han River at
5.5 million dong per square meters. In early December, A decided to sell the
plot of land at 8 million dong per square meter for other investments .

Especially, the prices of real estate in coastal areas have been rapidly
escalating. In June 2010, the land on Nguyen Tat Thanh road, near My Khe sea was
priced at 10 million dong per square meter. However, the price has jumped to 15
million dong per square meter. Now it is nearly impossible to buy land in the
area because landlords do not want to sell at a time when prices are expected to
rise further.

Meanwhile,
the prices of land plots near the central areas of the city, the square and the
public beach, have also increased from 30 million dong per square meter four
months ago to over 40 million dong now.

The prices
of land plots on Son Tra - Dien Ngoc route are escalating everyday. According to
Nguyen Thanh Son, an investor from Hanoi, since the prices of land in the
central areas have become higher, investors tend to seek less expensive areas.
Therefore, the contiguous areas between Da Nang City and Quang Nam province,
where land prices are lower, at 5-10 million dong per square meter, have caught
the eyes of investors.

Now
investors are hunting for land plots in resettlement areas located on
advantageous positions near Son Tra-Dien Ngoc road. The land plots here are
located near public beaches and high-end resorts. “The biggest advantage of the
land plots is that the they all have a “red book “ (the land use right
certificates), on which people are allowed to build high-rise buildings.
Meanwhile the prices remain reasonable at 5-7 million dong per square meter.

Multi-million dollar villas also targeted

While the
investors who do not have much money, are eyeing the land plots with reasonable
prices, wealthier investors are targeting high-end villas.

Deputy
Director of Cuong Hung Thinh real estate trading floor said that 5-star resorts,
such as Ocean Villa invested by VinaCapital, Hyatt by Indochine land, or The Sun
Villa and Vinpearl Da Nang have been specifically attracting investors. A large
volume of coastal villas has been launched onto the market with a sale price
relatively high at over one million dollar, but despite the price there have
been many successful transactions reported.

According
to CBRE Vietnam, a real estate service provider, by the third quarter of 2010,
Da Nang had had 29 high end apartment-villa projects under construction along
the Truong Sa coastal route. The launching of the 15 villas by Dune Residence
and 39 villas by Vinpearl Da Nang has heated up the market.

CBRE
believes that the strong development of infrastructure and the market
diversification of the city both have brought a specific attractiveness to Da
Nang. It is estimated that 80 percent of investors come from Hanoi and HCM City.

Song Minh

High grade apartments sit empty and silent Vietnam news daily update

Owners of high grade apartments have all been lowering rental charges to lure clients. Daily, the number of vacant apartments has been increasing. A lot of investors, who purchased apartments for later resale or lease to earn a profit are now like cats on hot bricks.

Tuoi tre has reported that a lot of new apartment projects have been completed and many will be delivered to clients soon. Their sources say the market will have an oversupply, as the number of clients able to rent such apartments is limited.

Showing Tuoi tre reporters an apartment at Central Garden in HCM City, Minh, a real estate broker, remarked that he has never seen such a dramatic rental decrease. A 90 square metre apartment with two bedrooms and good furniture can now be rented for only 14 million dong per month (about $700). It was once leased at $850 per month, but the tenant left when the leasing contract ended.

Minh revealed that many other apartments in the building are also leased at rates down by $100-150 per month in comparison with one year ago.

At Saigon Pearl, an area with “five star standards”, rental rates have also dropped sharply. For example, an apartment at SG Pearl Ruby 1 with two bedrooms (84-89 square metres), plus good home comforts and interior, is now offered at $800 per month, a decrease of $150-200 from previous rates.

The list of buildings in the same predicament is growing: Cantavil An Phu in District 2, Cantavil Hoan Cau in Binh Thanh, The Everich in District 11 and Hung Vuong Plaza in District 5 all have seen the rental charges decreasing.

Even though the rents have eased, it is not easy to find tenants. H, the owner of an apartment with three bedrooms at Central Garden, has not found a renter over the last month.

According to a real estate company director, there are too many new high grade apartments put into operation recently, leading to the sharp climb in supply. Meanwhile, demand has not increased, so leasing fees have plummeted.

He pointed out that The Manor Officetel in District 1 alone provided 620 new apartments, while 300 apartments opened at The Everich I in District 11 at the end of 2009. Another source observed that 530 apartments of Sapphire building will be delivered in 2010 and there will also be thousands apartments at projects like The Vista and The Estella.

In addition to high grade apartments, projects in lower market segments like Orient Apartment or Constrexim in District 4, each of which has hundreds of apartments, have also been opened. The majority are leased with “soft” rentals.

“Though the rents have eased, they remain relatively high and unaffordable for many people who have real demand for accommodation. The number of people who are financially able to rent these apartments is really modest,” a director of a real estate firm maintained.

Potential tenants of the apartments are expats, overseas Vietnamese who return to Vietnam to do business, and some Vietnamese with high incomes.

Source: Tuoi tre

Hanoians rushing to Da Nang to purchase high grade villas, apartments

Nearly 80 percent of the customers who buy high grade villas and apartments at real estate projects in the central city of Da Nang come from Hanoi, according to Savills, a real estate service provider. Meanwhile, clients from HCM City account for 13 percent, and the other buyers are foreigners, Viet Kieu (overseas Vietnamese), and residents from other provinces and cities.

Da Nang: Coastal real estate market bustling

Da Nang gets aggressive with real estate

Da Nang: 96.5% of FDI pours into real estate

Though the real estate market in Vietnam remains gloomy, the Da Nang market remains bright. Located in the central region, the city has beautiful beaches and landscapes that offer good opportunities for investors.

According to the Da Nang Statistics Office, about 2,100 new businesses got operating licenses in 2009, an increase of 23 percent over 2008. The number of businesses established in the last five years has increased rapidly. The increasingly high investment from Viet Kieus is also an important factor that leads to high demand for business offices in the city.

In 2009, the volume of kieu hoi (overseas remittance - or money sent by Viet Kieus to their relatives in Vietnam) to residents in Da Nang City was $94.6 million. In 2009, the city received 4,715 Viet Kieus who returned to visit their homeland.

Viet Kieus now own 57 businesses in Da Nang City, which has received a total of $500 million in investment capital. This has had a large impact on the trade and real estate market in Da Nang City, especially for leasing offices, villas, and apartments.

Recent surveys show that all the luxury villa projects are located in the areas along Da Nang’s beaches. In the second quarter of 2010, two new villa projects were launched, including Dune Residence and Vinpearl Da Nang.

At the same time, two apartment projects were marketed, Bau Thac Gian and Vinh Trung Plaza. Now Da Nang Market has eleven apartment projects with 2,300 apartments on sale.

All the apartments at Indochina Tower and Da Nang Plaza have been sold. The apartments for sale are now mostly located in four districts, Hai Chau, Thanh Khe, Ngu Hanh Son, and Son Tra.

The villa sale prices in Da Nang City are between $800 and $3900 per square meter, while the prices for apartments are between $750 and $3000 per square meter.

The most interesting characteristic of real estate in Da Nang is that sale prices do not depend so much on the area of apartments and villas, but rather on the positions and the views of the apartments and villas. Most buyers will prioritize the purchase of villas with a view of the sea, or villas near the sea.

According to Savills, the main buyers of the luxury real estate products in Da Nang are not foreigners or Viet Kieus with dollars in their pockets, but Vietnamese high-income earners. The majority of buyers are from Hanoi (80 percent) and HCM City (13 percent). Meanwhile, the other eight percent of buyers include foreigners, Viet Kieus, and residents from other provinces and cities.

Source: Dan tri

Property market hot in northern Hanoi | Look At Vietnam = Vietnam news daily update

Property market hot in northern Hanoi | Look At Vietnam - Vietnam news daily update: "While land prices in areas considered the “hottest” in Hanoi have declined, prices of land in “newly emerging” areas like Me Linh and Dong Anh have been climbing. VietNamNet Bridge – While land prices in areas considered the “hottest” in Hanoi have declined, prices of land in “newly emerging” areas like Me Linh and Dong Anh have been climbing.

After the Ba Vi land price fever cooled, Hanoi’s real estate market has become gloomy. Areas once considered the “hottest areas” in the last two years, like Lang Hoa Lac Road, the Highway No. 32 and Le Van Luong Road, have all seen real estate prices decreasing.

Land at Nam An Khanh project is now offered at 26-28 million dong/square metre, a decrease of two million dong over April 2010. Land along Le Trong Tan Road now sells at 30-33 million dong/square metre.

Phong, an investor offering to sell land on Le Trong Tan Road at 33 million dong per square metre, complained that she will lose two million dong/square metre, because she purchased the land at 35 million dong. Meanwhile, land along Highway No. 32 is now 26-28 million dong/square metre, down by 2-4 million dong.

Apartment prices in these areas have also decreased slightly, now selling at 14-16 million dong/square metre.

The price drops are considered sharp falls if compared with gold price fluctuations. The gold price is now at over 28 million dong per tael, increasing by 12 percent over the beginning of the year (25 million dong per tael).

When asked why prices of land and apartments, considered “high quality products” because they are not located far from the city centre, have become less attractive, real estate trading floor consultants responded that investors cannot see high opportunities here.

Land has become too expensive if compared with market prices. To have a land plot in these areas, one needs 3.5-5.5 billion dong, a very big sum of money.

“While you must have a big sum of money for investment, you cannot expect high profits, because land prices here are overly high already, and they are not likely to increase further,” Khanh, 36, a real estate investor, explained.

Investors are also worried about liquidity, because it is not easy to find people with enough money to buy the expensive products.

While land prices in some areas of Hanoi have cooled, prices are rising in other areas, like Me Linh and Dong Anh districts.

Khanh noted that recently the number of transactions in these districts has risen rapidly and he reaped fat profits from investment deals in these locations.

In Dong Anh district, people believe that land prices will rise quickly from current levels of 23-25 million dong/square metre when Nhat Tan Bridge is opened. Meanwhile, in Me Linh District, the implementation of a series of projects has made people believe that the area will develop fast.

Real estate brokers observed that these land investment deals will not bring fat profits as in other areas, but the profits will be big enough to satisfy investors with low investment capital. With just one billion dong, they can purchase products available at Cienco 5, AIC, and Minh Giang Dam Va projects in Me Linh.

Source: Dan tri

-

Affordable Homes Abroad

Thinking about buying a nice four-bedroom house in Louisville? How about one on an island paradise instead—Aruba, say. They cost about the same—around $240,000—but Aruba has better beaches. And with home values still shaky in many U.S. markets, international property could be a better investment.
The Caribbean, Mexico, Central America, and Canada are home to some of the most affordable housing markets in the world, according to Coldwell Banker's 2007 Home Price Comparison Index (HPCI) survey, which looked at the average sales prices of single-family four-bedroom homes with approximately 2,200 square feet of space in 77 markets outside the U.S.
Coldwell Banker, which has a presence in 42 countries, seeks out high-growth international markets that, for the most part, offer political stability, a high quality of life, and a strong economic future. Other spots that made the international most-affordable list included cities in Egypt, Bahrain, Poland, Malta, China, and Colombia.
The Coldwell Banker HPCI is meant to serve as a guide for world travelers and interested consumers who want to get a sense of how much a typical home for middle managers may cost in various markets around the globe. The cumulative average sales price of the homes surveyed in the 317 U.S. markets in the Coldwell Banker HPCI was $422,343. Warsaw, with an average sales price of $417,760, was the foreign market that came closest to the U.S. average.
Baby Boomers Abroad
Colombia's capital, Bogotá, was this year's most affordable international market in the HPCI study, with an average subject-home sales price of $140,000—slightly less than what it would cost to buy an equivalent house in Canton, Ohio. Two very different cities, for sure: Canton is home to the Pro Football Hall of Fame and the burial site of President William McKinley, while Bogotá boasts striking Spanish colonial architecture and a burgeoning economy (BusinessWeek.com, 5/28/07). The choice is yours.
Or, you could have both. "More and more Americans are living abroad," says Jim Gillespie, chief executive officer of Coldwell Banker. "The baby boomers in particular are now are looking internationally to buy second homes and retirement homes."
Many Americans also choose to purchase foreign property as an investment, or relocate overseas for business reasons. HiFX, a firm based outside London that provides foreign exchange services, estimates that there are more than 500,000 relocations of Americans to foreign countries per year, with the biggest concentrations of Americans residing in Mexico (approximately 1 million), Canada (700,00), and Britain (200,000).
Beachfront for a Song
According to a recent survey conducted by HiFX, Americans who invested in overseas residential properties from 2001 to 2006 achieved investment returns that were two to four times what were generally available in the U.S.
In Mexico: Guadalajara, Monterrey, and Mexico City made our list of the 25 most affordable international housing markets, with average sales prices ranging from $246,522 (Guadalajara) to $277,213 (Mexico City). "There's been this big shift to Mexico and Central America, where the beachfront property costs a fraction of the property in California or Florida," says Doug Johnson, manager of the Private Client Div. of HiFX.
A couple can live a "comfortable, but not elaborate" lifestyle in select retirement areas of Mexico for $1,200 to $1,500 a month, according to HiFX. For non-retirees, large Mexican companies such as Monterrey cement maker Cemex (CX) are also expanding globally and taking on more employees. U.S. companies are also investing in Mexico—Intel (INTC) now has a design center in Guadalajara.
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