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RESIDENTIAL MARKET UPDATE –FOREIGN OWNERSHIP LEGISLATION UNDER REVIEWFOREIGN OWNERSHIP LEGISLATION UNDER REVIEWPresented by: Marc Townsend - Managing DirectorSeptember 19, 2013
CONTENTS1 THE ECONOMY1. THE ECONOMY
2. RESIDENTIAL MARKET – A BUYER’S GUIDEA BUYER S GUIDE
• Price/Payment terms
• Location/Accessibility
l C• Developer/Contractor
• Legal
• New Launches
THE ECONOMYTHE ECONOMYMOVING IN THE RIGHT DIRECTION
ECONOMIC OVERVIEWGold and Bank Deposits Become Less Attractive
Global gold price: decreases 2,00050 g p18.1% YTD.
Local gold price: reached its bottom in June (down 22%) and
1,400
1,600
1,800
38
42
46
obal
gold
price
(US$
)
old p
rice (V
ND m
illion)
bottom in June (down 22%) and currently down 19.7% YTD
Deposit rates: 800bps reduction over the last 18 months
1,000
1,200
30
34
03/2012 06/2012 09/2012 12/2012 03/2013 06/2013 09/2013
Glo
Local
go
LOCAL GOLD GLOBAL GOLD
425
CPI (y-o-y, Vietnam) Rediscounting Rate Refinancing Rate CPI (m-o-m, Vietnam)
Inflation surged
over the last 18 months.Source: SJC
1
2
3
10
15
20
% m
-o-m)
Intere
st rat
es (%
)
Monetary expansion
-1
0
1
0
5
10
Nov-10 Feb-11 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13
CPI (%
CPI (%
y-o-y
) /
Monetary contraction Inflation controlled
4 HOME SWEET HOME| Q3/2013
y g y g y g
Source: State Bank of Vietnam
ECONOMIC OVERVIEW
Regional stock markets,
Stock Market Recovers, Real Estate to Come Back into Focus?
y-o-y return as of Sept 18, 2013:
Thailand (SET) up 16.6%;
Si (SGX) 9 2% Singapore (SGX) up 9.2%;
Indonesia (JCI) up 8.5%;
Vietnam (VNINDEX) peaked at Vietnam (VNINDEX) peaked at 528 points in June, up 26%, but dropped back to 14.0%.
Source: Bloomberg
REAL ESTATE INDEX 2Y 1Y 6M 3M 1M Current
Real Estate Holding & Development Listed Companies
48.8 43.6 41.9 45.4 41.3 41.5
Real Estate Services Listed Companies 75.6 54.4 24.4 26.6 23.8 21.1
5 HOME SWEET HOME| Q3/2013
Source: Stockbiz
DASHBOARD
Vietnam Economic Indicators Banking & FinanceECONOMIC
2Y 1Y 6M 3M 1M C tBANKING &
2Y 1Y 6M 3M 1M C t
Produced monthly by CBRE Vietnam
ECONOMICINDICATORS
2Y 1Y 6M 3M 1M Current
CPI (%) y-o-y 23.02 5.04 7.02 6.36 6.81 7.5
Trade balance
BANKING & FINANCE
2Y 1Y 6M 3M 1M Current
VN-Index 398.3 396.0 474.6 518.4 485.7 473.3
USD/VND (inter-bank)
20,828 20,828 20,828 20,828 21,036 21,036Trade balance (US$, bil)
(6.2) (0.2) 0.4 (1.7) 0.2 (0.3)
Retail & services Turnover (VND,
169.2 190.2 212.7 215.5 213.3 217.2
Local gold (VND mil/tael)
46.78 44.42 43.24 41.10 38.27 38.65
Lending Rate (%)* 20.7 14.8 15.5 15.3 13.2 13.2
Deposit rate (%)**16 8 10 9 10 5 9 6 8 4 8 4
Real Estate Companies New Launches(***) (Condominium for sales)
( ,tril)
p ( )(1-year term)
16.8 10.9 10.5 9.6 8.4 8.4
Source: GSO Source: GSO, SBV, SJC & HSX
p ( ) ( )REAL ESTATE INDEX
2Y 1Y 6M 3M 1M Current
Real Estate Holding & Development Listed C i
48.8 43.6 41.9 45.4 41.3 41.5
NEW LAUNCHES 2Y 1Y 6M 3M 1M Current
HCMC New launches (unit)
6,993 4,674 2,523 2,246 1,186 885Companies
Real Estate Services Listed Companies
75.6 54.4 24.4 26.6 23.8 21.1
launches (unit)
HN New launches (unit)
19,660 9,003 3,460 1,963 1,338 842
Source: Stockbiz Source: CBRE(*) Current lending rate is the average lending rate surveyed at ten banks, applied for home loan only. The back-dated numbers are the average rate which was announced
6 HOME SWEET HOME| Q3/2013
publicly at that point of time, applied for all sectors and all banks . (**) Deposit rate is the average deposit rate of a basket of ten banks in which the rates are announced publicly on their websites and can be tracked backwards.(***) New launches is the number of units that were released to the market by developers and calculated on a monthly basis .
NEWSPAPER ADVERTISEMENT UPDATE - HCMC
Ad ti d b Di t i t HCMC YTD 2013 Ad ti d b M th S th Vi t * 2013
Produced weekly by CBRE Vietnam
Advertised by District, HCMC, YTD 2013 Advertised by Month, Southern Vietnam*, 2013
125
150
25
30
ments
ts18%15% District 7 District 9
25
50
75
100
5
10
15
20
umbe
r of a
dvert
isem
Numb
er of
projec
t
11%
7%7%5%5% Thu Duc District 2
Nha Be Tan BinhGo Vap Tan Phu
0
25
0
5
Mar Apr May Jun Jul Aug MTD Sep
Nu
Number of projects Number of advertisements
11%
8%7%7%7% District 8 Binh Tan
Others
Source: CBRE (*): HCMC, Binh Duong and Dong Nai, BR-VT
Number of projects Number of advertisements
Developers spend more on adverts. Sharp increase in bothnumber of projects advertised and number of advertisements.
7 HOME SWEET HOME| Q3/2013
NEWSPAPER ADVERTISEMENT UPDATE - HANOI
Advertised by District Hanoi YTD 2013 Advertised by Month Hanoi 2013
Produced weekly by CBRE Vietnam
Advertised by District, Hanoi, YTD 2013 Advertised by Month, Hanoi, 2013
200
250
20
25
30
emen
ts
cts27%6%4%
Hoang Mai
Tu Liem
50
100
150
5
10
15
20
Numb
er of
adve
rtise
Numb
er of
projec
11%
5% Ha Dong
Cau Giay
Thanh Tri
00
5
Mar Apr May Jun Jul Aug MTD Sep
N
Number of projects Number of advertisements
24%16% Thanh Xuan
Others
Source: CBRE
Affordable projects continue to dominate advertisements in Hanoi
8 HOME SWEET HOME| Q3/2013
ECONOMY EASES, PROPERTY MARKET IMPROVES,
Current economy• Inflation stayed soft
R f th t k
Residential market will again becomes attractive to Vietnamese investors as other• Recovery of the stock
market• Interest rates cut• Local gold price
decreases The next round of
Improving infrastructure will facilitate the property market
investors as other alternatives (gold, stock market, deposit accounts) offer limited returnsdecreases
• Establishment of VAMC
The next round of interest cuts proves to be one of the most decisive in improving residential purchaser
ti tsentiment
By 2014 the residential market will have passed the bottom
9 HOME SWEET HOME| Q3/2013
RESIDENTIAL MARKET – REGIONAL COMPARISONHCMC gains its competitiveness in the region
356 000
25
30
35
5,000
6,000
per m
onth)
psm)
15
20
25
3,000
4,000
Rent
(US$
psm
ling P
rice (
US$
5
10
15
1,000
2,000
Buy-t
o-let
RSell
0
5
0
1,000
Bangkok Manila Kuala Lumpur Jakarta Ho Chi Minh City
Average Selling Price Average RentSource: CBRE
10 HOME SWEET HOME| Q3/2013
RESIDENTIAL MARKETRESIDENTIAL MARKETA BUYER’S GUIDE
VIETNAM RESIDENTIAL CYCLEAre we out of the stagnancy?
Peak property market and Since 2009: Hard hit by global
2007-2008PEAK
Peak property market and prosperous economic situations Speculators dominated the
market. Large unit size preferred:
y gand local economic uncertainties
The Vietnamese economy started slowdown negatively impacted the property market
Large unit size preferred: 2 BR: 80 - 90 sm 3 BR: over 100 sm
p p p yspeculators quit the market.
2009-2010Mixed story
Since 2011: macro-economic uncertainties lack of cash.
S ll it i f d
2004-2006Frozen
Smaller unit size preferred because of the limited budget
2 BR: 60 - 80 sm 3 BR: over 90 sm
20132011-2012Stagnant
12 HOME SWEET HOME| Q3/2013
A BUYER’S GUIDEWhat to consider when buying a home?
PRODUCT
PRICING
PRODUCT
Legal Others
13 HOME SWEET HOME| Q3/2013
A BUYER’S GUIDE - PRICE“High-end” has become middle-class housing
Units Sold by Segment, Q1/2013 Units Sold by Segment, Q2/2013
03%
Luxury High-end Mid-end Affordable
“00%
Luxury High-end Mid-end Affordable
30%42%
Affordable units continued to be the most-sought after.
More units sold in high-
40%43%
26%
Average selling price (US$/sm)
gend segment y-o-y thanks to more attractive payment terms plus incentives
17%
incentives.
”Source: CBRE
1,500
1,800
2,100
e US/
sm)
High-end Mid-end Affordable
600
900
1,200
1,500
2008 2009 2010 2011 2012 2013
Avera
ge pr
ice
14 HOME SWEET HOME| Q3/2013
2008 2009 2010 2011 2012 2013
A BUYER’S GUIDE - PRICEIs there a real price cut?
Sunrise City Project Phase 1 – South Towers Phase 3 – North Towers
Location / ViewBy Rach Bang Canal Cooler air
City view Him Lam residentialLocation / View Cooler air
Phu My Hung view Him Lam residential area
Price VND40-50 mil psm VND23-30 mil psm
Hand-over condition Semi-furnished Bare-shell
No. of Units/floor 4-6 units/floor 11 units/floor (Block X2)
Main contractor Kumho 1 Hoa Binh Corp.
Status In operationUnder constructionExpected completion: 2015
15 HOME SWEET HOME| Q3/2013
Expected completion: 2015
A BUYER’S GUIDE - PRICEProjects with improved payment schedules & reduced interest rates
Tropic Garden District 2 Xi Riverview Palace District 2
The Estella – District 2
• 719 unitsC t ki i $1 600 $1 800/
Tropic Garden– District 2
• 388 units• Current asking price: $1,100-$1,300/sm
• Good payment terms: hand-over when 50% paid, the rest payable with 0%
Xi Riverview Palace – District 2
• 258 units• Current asking price: $2,200-$2,500/sm
• High discount: 18% if 98% payable
• Current asking price: $1,600-$1,800/sm
• Good payment terms: hand-over when 50% paid, the rest payable with 0% interest rate in 2 years
p , p yinterest rate in 3 years
SGC Nguyen Cuu Van– Binh Thanh
• 104 units• Current asking price: $1,000-$1,100/sm
Imperia An Phu – District 2
• 700 units• Current asking price: $1,500-$1,800/sm
• Excellent payment terms: hand-over when 10% 30% paid the rest payable
Him Lam Riverside – District 7
Current asking price: $1,000 $1,100/sm
• Good price and payment terms: 50% hand-over, the rest payable in 1 year with 0%
when 10%-30% paid, the rest payable with 0% interest rate • Free parking• Furniture package• Gym free for 1 year
• 314 units• Current asking price: $1,357 - $1,457/sm
• Good payment terms: 50% hand-over, the rest payable in 2 years with 0%
Sunrise City (North) – District 7
• 554 units• Current asking price: $1,119 - $1,428/sm
• Smaller unit size, lower price than P1,
Happy Valley – District 7
• 541 units• Current asking price: $1,500 - $1,700 /sm
• Longest payment schedule (30 months) in PMHF ki
16 HOME SWEET HOME| Q3/2013
• Good payment terms (54 months) –Central towers
• Free parking
Source: CBRE
A BUYER’S GUIDE - LOCATIONInfrastructure development will ramp up property values
The Vista
Thao DienPearl
Imperial An Phu
Future projects
CantavilPremier
E t ll
p j
Existing projects
Metro line 1
17 HOME SWEET HOME| Q3/2013
EstellaMetro stationSource: CBRE
A BUYER’S GUIDE – LOCATIONMetro Line No. 1, Saigon Bridge moving at pace
Metro Line No. 1 is making good progress
18 HOME SWEET HOME| Q3/2013
A BUYER’S GUIDE – DEVELOPERS/CONTRACTORS
Brands – a way to categorizey g
• Property developers and construction companies
• Helps to quickly and easily identify a property/service
• Sets levels for quality & standards
• International/national visibility & product knowledge
• Enhances value
19 HOME SWEET HOME| Q3/2013
A BUYER’S GUIDE – LEGAL ISSUESMore opportunities for foreigners to buy houses in VN
Current Law(Resolution No.19, effective 2009 - 2013)
Proposed Amended Law(effective 2014 IF approved)
Foreign Individual Buyers
YES with restrictions such as:• Individual investors who make direct investment
in Vietnam;• Expatriates at managerial positions;• Individuals who possess special skills that are
YES for all foreigners who have a visa to the country that is valid for at least three months
• Individuals who possess special skills that are needed in Vietnam;
• Individuals who are married to Vietnamese citizens;
Foreign ONLY foreign-invested companies operating in YES to all foreign investment funds, banks, Vietnamese gOrganisations
g p p gVietnam which are not in the real estate business but have the need to provide accommodation to their employees.
gbranches and representative offices of overseas companies.
Sub-lease NO YES
Product Apartments only. Apartments + landed property (less than 500 sm)
Number of Product
One unit only For individuals:• Option 1: Unlimited• Option 2: Limited to one or twoFor organisation:• Depend on the number of foreign employees it has
Maximum Lease Term
50 years • Option 1: 50 years with the possibility of another 50-year extension;
20 HOME SWEET HOME| Q3/2013
• Option 2: 70 years with no extension.
A BUYER’S GUIDE – LEGAL ISSUESHouse Foreign Ownership – Regional comparison
Thailand Singapore
YES with some restrictions:YES S i
Foreign Individual Buyers
YES with some restrictions: Holding a residency permit under Thai Immigration law. Permitted to stay in Thailand under the Investment
Promotion law (BIO) A foreigner or foreign entity remitting a foreign currency
into Thailand or withdrawing money from Thai Baht
YES Some important notes: They have to pay an additional buyer's stamp duty
(ABSD) on the higher of the total purchase price or market valuation. Only citizens and Permanent Residents of some
into Thailand, or withdrawing money from Thai Baht account of the persons residing abroad, or withdrawing from foreign currency account
countries which have signed free trade agreements (FTAs) with Singapore are exempted from ABSD.
Sublease YES YES for condo only
YES ith t i ti
Foreign Organisation
YES with some restrictions: Only joint-venture between a foreign and a local company
with at least 51% of share held by Thai Foreign juristic entity in receipt of a promotion certificate
under the Investment Promotion Law.
YES with higher ABSD rate
Product Condominium: as long as the building has not already sold its 49% foreign quota.
Condominium of a six- or more- storey. Landed house with condition: Approval from the Controller of Residential Property For accommodation purpose only.
Number of Product
N/A
Condominium: unlimited but a single foreign party cannot buy all the units in a condominium development without prior approval.
Landed house: 1
21 HOME SWEET HOME| Q3/2013
Maximum Lease Term
30 years with another 30-year extension 99-year lease
A BUYER’S GUIDE – LEGAL ISSUESNot quick and easy way out of reducing over-supplied market
“ Like first time buyers, retirees, up-graders,
Vietnamese overseas and newly married couples; y p
foreigners should be seen as a logical extension of
a maturing market, not just a quick fix.
Foreign buyers have been and will be following the
market carefully. They will be keen to buy when they
see the market turning round; and not before!
”g
”Source: Dung Duong, Associate Director, Research and Consulting Services, CBRE Vietnam
22 HOME SWEET HOME| Q3/2013
HCMC RESIDENTIAL MARKETNew High-end Launches – YTD 2013
The Prince Residence
Phu Nhuan District277 units by Novaland@ $2 000-$2 600/sm
Happy Valley (P1+P2)
District 7, 541unitsPhu My Hung Corp.@ $1 500/sm
The Vista (Tower 4)
District 2, 141unitsCapitaland + Phu Gia@ $1 400/sm - $1 700/sm@ $2,000 $2,600/sm @ $1,500/sm @ $1,400/sm - $1,700/sm
Sunrise City (North)
District 7, 182 units (total 554)by Novaland@ $1 119 $1 428/sm
Dragon Hill Residence & Suite
Nha Be District, ~150 units by Phu Long RE Corp. @ $1 190 $1 286/
23 HOME SWEET HOME| Q3/2013
@ $1,119 - $1,428/sm @ $1,190 - $1,286/sm
HCMC RESIDENTIAL MARKETNew Mid-end & Affordable Launches – YTD 2013
Sunview Town
Thu Duc District1,603 units (total) by Dat Xanh
Metro Apartment (Screc II)
District 2, 104 unitsby Saigon Corp. &
Nhat Lan 3
Binh Tan District240 units by BCCI
Ehome 3 P2
Binh Tan District161 units by Nam 1,603 units (total) by Dat Xanh
@ $520/smby Saigon Corp. & Hung Thinh Land @ $811/sm
0 u ts by CC@ $571 - $619/sm
6 u ts by aLong @ $794/sm
SGC Nguyen Cuu Van
Binh Thanh District , 104 unitsby SGC
Phuc Yen 2
District 12, ~234 units by Phuc Yen Co., Ltd.
Homyland 2
District 2, 425 units by Bao Son Co., Ltd.
Dream Home
Go Vap District, 518 units by Dream Home Co., Ltd.
24 HOME SWEET HOME| Q3/2013
@ $1,069/sm@ $767/sm @ $761 - $881/sm @ $567/sm
* Soft launch
NOTABLE CONDO PROJECTS TO LAUNCH BY 2016SORAGardens, Phase 2&3
Binh Duong New City
Becamex Tokyu Co LtdBecamex Tokyu Co. Ltd
~1,500 high-end condos (P1: 404 units)
SSG Tower
Van Thanh Str., Binh Thanh District
By SSG Van Thanh Corp.p
~78 high-end condos
Delta River Tower
Ton Duc Thang Str., District 1
Canh Hung HaiCanh Hung - HaiThanh JSC.
~163 luxury condos
25 HOME SWEET HOME| Q3/2013
VIETNAM SECOND HOME MARKETNORTHERN REGION
Provinces: Sapa, Cat Ba, Ha Long, HaiPhongPhong
Weather: 4 seasons
CENTRAL REGION
Provinces: Hue, Lang Co, Da Nang, Hoi An Quy Nhon Phu Yen Nha Trang DaAn, Quy Nhon, Phu Yen, Nha Trang, Da Lat
Weather: 2 seasons, mostly monsoons in Nov - Dec
SOUTHERN REGIONProvinces: Phan Thiet, Ho Tram, Long Hai, Vung Tau, Con Dao, Phu Quoc
26 HOME SWEET HOME| Q3/2013
Weather: 2 seasons – Dry: Nov - Apr; Monsoons: May - Oct
At CBRE, we live and breathe
Every week – NEWSPAPER UPDATESE th DASHBOARD
the business of real estate
Every month – DASHBOARDEvery quarter – QUARTERLY REPORT
For more information regarding this presentation please contact:MARC TOWNSENDManaging DirectorT +84 8 3824 6125F +84 8 3823 8418Email: [email protected]