NSW Indochina - Ho Chi Minh City & Phnom Penh

If ever anybody is traveling through Saigon or Phnom Penh ... this is a standing invitation to talk all things and anything property.

 

I have been to these 2 cities, more so for Phnom Penh than Saigon. They are cites growing at an astonishing rate esp so for Saigon. Saigon currently has around 9 million people (Sydney and Melbourne people combined) while Phnom Penh has around 2 million (like Perth).

If one complain about the rate of house price increases in Sydney or Melbourne, wait till you go there. Prices have been doubling in a matters of years in both Saigon and Phnom Penh over the last 2 decades, and this will not stop though the rate of increase has tapered recently esp for PP (Phnom Penh). Again, if we complain of Chinese influences in Sydney and Melbourne also, look at PP. The city is literally a colony of China now. Almost all the largest construction projects are undertaken by Chinese companies and thrones of Chinese visitors visit the city daily. The fact that the largest Chinese school outside of China reputedly having 6000 students is situated in PP, is a testimony to the might of the Chinese. With such great support, the future of PP seems good. And for those who complain of American influences in Australia, come to Cambodia - they use US currency in all their major transactions. Their local money - Riel is relegated to paying for small items like taking Tuk Tuk. But this is actually good for us as investors as US dollars is much more stable and is easier for us to calculate.

The main problem about investing in these 2 cities would be the red tapes. Legally speaking, foreigners cannot own land in any of them. One can own apartments there, just like in Australia, but this is not what the locals really demand for. Moreover, many of these are just lease hold properties. There are ways to go around this : For eg I know of real estate companies that help potential investors get "citizebship" in "Cambodia at a price of US$50,000. This effectively enable one to buy any property at PP since he is no more a foreigner. Of course, whether it's worth doing this is anyone's take. And there is a real estate company run by Chinese Australian in PP too doing good business targeting the overseas buyers or renters like you and me. They charge between 8 to 10% of rent as commission for renting out apartments or houses for owners, which is pretty costly by our standard here.

Depending on ones situation too, it could be "hardship" life if one is to constantly go to these cities to oversee your investments. This might put family people off. On the other hand, people who likes partying and nightlife will find them very thrilling.

So in all, PP and Saigon definitely are good investment locations. Compared to Sydney and Melbourne, their properties are still cheaper. And due to the massive population increase, the outlook for property growth there is good. Esp at this time when outlook for property investment here in Australia looks uncertain, it could be a good idea to think out of the box and invest there. But one has to be willing to take risk and "rough it out there".

 

Considerable foreign investment, the building of the new subway/metro system are positive indicators of growth in Saigon. Then there's the very young population (I would have to double-check this but something to the tune of 65% of residents there are under the age of 30) who are all driven to forge their identity and make their mark in a rapidly changing society. An incredibly dynamic place to be at the moment.

The pace of change in that city is blinding. Blink and you might just miss everything!

 

I'm in Hanoi at the moment. So many apartments being built by Vingroup. I see opportunities here.

 

One of the major considerations is the changes to law with respect to real estate investment. My friend bought an apartment with 30 years lease and has to sell to Vietnamese at the end of lease as he's not a citizen.

I'm keen on setting up business here but many hoops to jump through.

 

Technically leasehold only and restricted ownership to Vietnamese.

Exception is apartment as mentioned (and then limited by suburb or ward) - massive oversupply, drive past the blocks in the evening and count the number the lights are on (and security guards are paid to put the lights on to make the buildings look occupied).

And a labyrinth of paperwork involved. I recall reading a local review of foreign ownership about 5 years after its introduction, I think only a couple hundred actually purchased across the whole country in the entire time.

 

Thanks @VB King