Business » Real estate
Overseas remittances pour into real estate
  • | VietNamNet, dtinews.vn | February 02, 2013 06:55 PM
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Despite higher overseas remittances, less capital has been pumped into the domestic real estate market recently but more has been spent on buying foreign houses.

 

Increasing numbers of Vietnamese are interested in overseas property investment

Less investment in domestic real estate

In previous years, overseas remittances to Vietnam sharply increased towards the end of the year, with the majority of the capital pumped into the real estate market.

According to statistics from the National Committee for Financial Supervision, the country received over USD9 billion worth of overseas remittances in 2011, 52% of which was used to invest in real estate.

Last year, despite the economic difficulties, overseas remittances to the country still increased by 20% from a year earlier, to nearly USD11 billion.

Due to the long-lasting slump in the domestic real estate market, Vietnam based receivers of remittances have been more hesitant to invest in the domestic market, and instead are seeking safer investment channels abroad.

Pham Duc Toan from the EZ Property Company said fewer overseas remittances were pumped into domestic real estate due to the poor value offered by the market.

The situation would get worse for this year as a result of modest liquidity in the market, Toan noted.

Nguyen Hoang Nam from Info Real Estate Transaction Floor said people often make investment decisions based on the prestige of a project’s investor, construction quality and implementation progress.

Vietnamese people who work abroad often use their relatives to invest in real estate. This means that they put safety as a top of priority when making an investment decision, Nam assessed.

Overseas investments preferred

Increasing numbers of Vietnamese have bought houses abroad under several forms.

With land prices in the US bottoming out, several Vietnamese decided to invest.

An official from Vietnam Real Estate Association said more Vietnamese people wanted to buy houses abroad in recent years, mainly in the US and Australia.

According to the statistics by Coldwell Banker Singapore, Vietnamese house purchases in 2010 accounted for 3.2% of real estate transactions in Singapore during that year.

An early wave of Vietnamese investment in the US real estate market has also been recorded.

More and more international housing consultancy agencies have started operations in Vietnam. For the first time a high-end apartment project in London has offered to sell their products in Hanoi at seven million pounds (USD11 million) per property.

Even though laws and regulations in Vietnam don’t ban people from investing in real estate abroad, there are extremely tight restrictions in transferring large volumes of cash abroad for personal purposes.

Due to these obstacles, many people have failed to complete procedures to buy property overseas despite paying deposits.

Real estate expert Edward Chi warned that in order to effectively invest in the foreign real estate market, Vietnamese investors should carefully study the laws in the countries they are considering buying property.

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