Why not Phnom Penh or Bangkok? Why Ho Chin Minh ranked in the top 10 Asia Pacific Real Estate for international real estate capital?

• 27 July 2023
• Local News
• 2159 Views

Phnom Penh, the thriving capital of Cambodia, has been experiencing robust growth with a surge in size expansion, foreign direct investment (FDI), and flourishing real estate development. Nevertheless, it remains relatively small when comparing investment volumes to other major ASEAN cities. In contrast, Bangkok, the bustling capital of Thailand, stands out as a major attraction for foreign investors seeking luxury residences, particularly condominiums, with sales soaring over 200% in recent times, as reported by CBRE Thailand. Remarkably, Bangkok’s home prices rank among the most affordable in key global cities, as revealed by CBRE’s analysis on RE Talk Asia.

Tokyo has been ranked No. 1 for four years in a row, and this year Singapore is ranked No. 2 and Ho Chi Minh City is No. 3. Although Ho Chi Minh City in Vietnam has notched its place among the top international real estate capitals, this vibrant metropolis boasts unique attributes that set it apart from Bangkok, despite its smaller size. The city’s remarkable rise is underpinned by various undeniable facts that make it stand out as a dynamic and promising real estate market:

High Real Estate Prices: An initial review of real estate prices in Hanoi and Ho Chi Minh City suggests that prices are rather high when compared with comparator cities in Asia.

Slower but more robust Economic Infrastructure: Both are similarly affected by the Covid-19 crisis and the global economic crisis, yet Vietnam’s economy seems to be stronger because it is both a liberal and semi-planned economy and the real estate market is growing as a result. Vietnam’s economy is more resilient and recoverable, while the Thai economy is often plagued by political turmoil. The economy is back on track, and the real estate M&A market is thriving in key cities such as Ho Chi Minh City, Hanoi, Binh Duong, and Dong Nai.

Affordable Home Prices: Home prices in Vietnam are considered very affordable compared to other property hotspots favored by the Chinese such as Bangkok. A high-end property in Vietnam can cost up to $5,000 per square meter, while in Bangkok, it can cost up to $15,000 per square meter.

Infrastructure Improvements: Vietnam’s plan to improve its infrastructure is also a plus factor for foreign real estate investors. Cities like Ho Chi Minh City are quickly developing and merging with other cities, and plans to upgrade residential properties, schools, hospitals, and roads are underway.

Fast-Growing Cities: Ho Chi Minh City is one of Asia’s fastest-growing cities, and it is a hub for business and entrepreneurship. Practically anything of business importance happening in Vietnam goes through Ho Chi Minh City, making its real estate market popular with expats and foreign investors. Hanoi, on the other hand, provides a noticeably different feel than Ho Chi Minh City, and its property market is also very different.

Urban Transport Infrastructure: Both Vietnam’s two big cities – HCMC and Hanoi – are investing vigorously in urban transport infrastructure, inter-regional traffic, and other infrastructure improvements.

Growing Middle Class: The rise of Vietnam’s middle class has driven increased demand for quality properties, setting the stage for a robust residential market. As the middle class continues to expand, so does the appetite for modern and well-designed homes.

Strategic location and regional connectivity: Ho Chi Minh City is geographically located at a strategic gateway to Southeast Asia and the Asia-Pacific. Ho Chi Minh City provides special connectivity and an extensive infrastructure network for both Vietnam’s other major cities and for other Asia-Pacific countries entering mainland ASEAN. Access to this unique regional and global market increases the city’s attractiveness as a preferred destination for international investors.

 

• Analysis