With remittances hitting $17 billion, some investors and homebuyers in Hanoi and Ho Chi Minh City are expecting the market to warm up towards the end of 2019 and early 2020. The expectations are quite reasonable because Vietnam has been one of the top ten recipients of remittance over the world for the last three years. Moreover, as the financial and gold markets are undergoing turbulence, remittance money is finding its way into real estate projects.
Is soaring remittance good news for real estate?
The World Bank estimated remittances flowing into Vietnam in 2019 at $16.7 billion. This is the fifth time Vietnam has entered the top ten remittance-receivers over the world. Remittance flows into Vietnam have risen 120-fold, from $0.14 billion in 1993 to $13.8 billion in 2017, and soared to $16 billion in 2018. Experts said that the $16.7 billion of remittances in 2019, equivalent to 6.4 per cent of the GDP, was quite a boot for the socio-economic development of the country.
Luong Thanh Nghi, deputy head of the State Committee for Overseas Vietnamese Affairs, said that there are 4.5 million Vietnamese living, working, and studying in 110 countries and territories over the world, and as many as 3,000 firms owned by overseas Vietnamese operate across 52 cities and provinces of the country with the total registered capital of $4 billion.
These overseas Vietnamese investors come from the US, Canada, Australia, Russia, France, the Netherlands, Japan, Poland, and Switzerland. Their projects and businesses usually specialize in trade, export, tourism, construction, real estate, farming and processing seafood, as well as software.
Experts said that remittances to Vietnam consistently rank in the top ten because most Vietnamese businesses and employees who do business and work overseas maintain close ties with their families, parents, brothers, and sisters in Vietnam.
Especially, Vietnamese people are keen to save money and send it home to their families so that they can buy a new house. Additionally, some of those working abroad had borrowed a lot before going abroad, so they had to send money back to repay.
Notably, although Ho Chi Minh City receives the most remittances in the country, a big part of this has been spread across the country, with great amounts spent on buying houses in Hanoi, markets that are more profitable than Ho Chi Minh City.
Chairman of Phu Quy Land Nguyen Manh Ha confirmed that based on more than 20 years of experience in real estate brokerage, remittance receivers have a distinct taste for real estate because they are inexperienced in other investment sectors.
Which projects are hottest?
While real estate is the favorite investment sector for the huge remittances flowing into Vietnam in 2019, according to Nguyen Van Dinh, the general secretary of the Vietnam Association of Realtors, remittances will go to the real estate projects that are legally clean and provide attractive discounts and good customer care services.
This is a chance for remittance receivers to show off the money their families send home through new and beautiful houses.
In order to welcome remittances at the end of the year, real estate developers have been pushing up and releasing projects along with offering preferential and supportive policies.
MIKGroup, the developer of The Matrix One, said that they are launching a broad sales campaign to serve homebuyers from other localities, even Ho Chi Minh City, and support them with the paperwork and proving their financial resources.
"This year, after my family sent home nearly $100,000, I decided to buy an apartment at The Matrix One in the My Dinh area, in which I have been interested for a long time because of its good location and modern design, as well as proximity to the F1 racetrack and a large park," Ngo Thi Ha (living in Cau Giay district) said.
She also said that The Matrix One is one of the very few projects in Hanoi released at this time. Besides Ha, her friends are also interested in the project and would like to buy an apartment for investment purposes.
"The Matrix One has already finished the fourth floor, and construction is carried out at a very high speed. The most time-consuming part of every project is the foundation, basement, and commercial floors. The construction of the floors for apartments will be much quicker, around 4-5 days a store. Now that the four commercial floors are completed, The Matrix One is expected to be topped out and finished by the end of 2020," a manager of MIKGroup said.