The luxury real estate market in Vietnam is booming this year. This echoes a thriving economy that seems set to keep up the trend for the foreseeable future. For example, in Hanoi, a luxury multimillion-dollar estate of luxury mansions sold out in just a few days. In many cities across Vietnam, developers in the luxury market cannot seem to build quickly enough to keep up with the demand. Ho Chi Minh City boasts some fabulous apartments, each being sold for upwards of US$2.5 million. Equipped with their own private elevators and balcony swimming pools, these five-star projects seem set to multiply all over the country.
The most exciting enterprise of late was the completion by Kusto Group of a high-end development of their own in Vietnam. The first of its kind by the group’s development branch, Kusto Home, it is certain not to be the last.
The unique project has been named ‘Diamond Island’. It is set on a gorgeous natural island that’s very near to Ho Chi Minh City. The development consists of over a thousand luxurious apartments and about forty different recreational amenities.
As befits the island theme, visitors and citizens have access to a fabulous fifty-meter lap pool, an additional resort swimming pool and a children’s water park.
Despite the luxury, city-type accommodation, the apartments have been set in beautiful natural surroundings full of flowers and trees. Kusto Home is one of the first property developers in Vietnam to combine this type of natural park-like surroundings with luxury residential condos.
Kusto Group is especially proud of this project because it had to contend with tough competition across within the Asian market. Using an entrepreneurial approach, they were able to successfully compete and flourish in the international arena. The firm is enthusiastic to see what the future will bring in light of this major accomplishment. It is the first project successfully completed by a Kazakh developer in this niche market.
More broadly, there’s been a steady increase in premium and luxury developments in recent years. One of the main reasons is that, three years ago, there was a change in legislation regarding foreign property ownership. Foreign buyers are now free to take on long term leases which has made it far easier for them to purchase property in Vietnam, even if not for personal use. Furthermore, Vietnamese developers can sell almost a third of the apartments in a block to foreigners, whereas before they could sell them just one unit per block.
This luxury property boom is happening along the coast too, for instance in Danang and on Phu Quoc island.
Vietnam has many young, driven entrepreneurs – around 95 million in total – who are rapidly becoming wealthier. The entire upper middle class in Vietnam is projected to double by 2020. This will create an increased market for luxury real estate sales and leases. There has already been an almost 10% annual rise in apartment prices since 2013. The price hike looks set to continue to increase.
Seeing the opportunity, more developers are seeking to enter the luxury end of the market. The significant demand is also highly attractive to overseas developers. What makes things even more attractive is that, in Vietnam, property can be sold off-plan as soon as basic development infrastructure such as roads, street lights and basic landscaping have been put in place.
Most buyers are still local, although a great deal of interest has emerged from buyers in Hong Kong, China and Korea, for instance. They see better value in Vietnam than in their own countries. This trend should ensure that demand for luxury properties is kept high for at least the next five years.
The prospects for investors are also very good because there is still a bigger demand than there is a supply of luxury properties.
A huge increase in tourism in the coastal areas of Vietnam is also fuelling the boom of the luxury property market. The market for holiday homes along the coast is growing, helped along by drawcards like international quality golf courses and tourist attractions. Most of the high-end coastal properties are being bought up by locals, but the number of foreign buyers is set to rise as new airports and other transport systems are completed.
Kusto Group say that they intend to apply everything learned when working on the Diamond Island project in Vietnam in future developments. For instance, in Kazakhstan, Kusto Home are busy with a residential development that will continue the natural environment theme. The 800-unit project overlooks the beautiful Kok Tobe mountain. The guiding vision of the chairman, Yerkin Tatishev, is based on the company’s motto: “Dare to do things better”, which bodes well for new challenges upon which Kusto Group is embarking across the globe.