Welcome back to our second piece on Vietnam. This time I will be sharing my thoughts on the business hub of Vietnam, Ho Chi Minh City, formerly known as Saigon. Just to recap from our previous segment, Hanoi is widely considered as the administrative and policy-making centre of Vietnam. Saigon, on the other hand, has the economic centre and it is the heart and soul of Vietnam’s commerce scene. Money is on everyone’s mind and the pulse of deal-making and business development is palpable everywhere you go.
Ho Chi Minh City
Ho Chi Minh City (HCMC) has a population of almost 8.5 million people. The most telling and easy way of identifying the urban districts is from 1 through to 12. (Hunger games always comes to mind). District 1 is the Central Business District (CBD) where most of the commercial buildings including the Saigon Trade Centre are located. District 2 across the Saigon river is increasingly gaining in prominence as the new residential hotspot across the high-end Binh Thanh district. The master-planned area of Thu Thiem within District 2 is touted as the next CBD and id being compared with what Pudong is with the Shanghai CBD. District 7 is also another district with a prominent master planned community at Phu My Hung and is also seeing increasing importance as a residential suburb.
Vietnam has a population approximately 94.6 million people as of 2016 census. It is a fast modernising nation with a 2017 nominal GDP of US$215.8 billion with projections by Goldman Sachs to double by 2025 to US$436 billion. That is a phenomenal growth rate to achieve that target in 7 years. Vietnam’s economy is driven primarily by agriculture and manufacturing. But we are starting to see growth coming in from the technology sector along with the construction sector due to drive to improve transport infrastructure in the country. The population is young with half of them below the age of 30, the income levels are rising across the board. In short, Vietnam is a country with a central government, a young, hardworking population with increasing income levels and increasing openness to foreign direct investment. Not unlike what China was 20 years ago. And therein lies the opportunity for savvy investors. I will focus on the Capital city of Hanoi in this piece.
As far as the property market goes, 2015 was dominated by politics. The year started in trepidation of the May election outcome and ended with bewilderment that the supposed best case scenario of an outright Tory victory has proven likely to be more painful than a victory by Ed Miliband’s Labour party
Despite the Government facing little in terms of true opposition and thus having the supposed freedom to do as they will, the Tory party is far from behaving as one might have expected. Much is made of the Chancellor’s austerity measures, yet the national debt keeps rising and he flunks the truly tough decisions on welfare etc. With cuts in spending only able to go so far, it comes as little surprise that the rich (a precise definition open for some debate) would be paying more through increased taxes as illustrated here.
I know something is up when I suddenly get multiple calls from friends or contacts who know about what I do here at RunningStream. These days it is calls enquiring about Melbourne properties. (Which is fine.) Specifically, about investing in Melbourne CBD apartments. (Which is NOT fine.) I know then that my friends must have seen the news about the cut in the Australian interest rate, cheap AUD, the inherent stability of the Australian housing and the accelerating growth in home prices. Everyone wants to jump onto the bandwagon of owning an Australia property these days.
Many agencies here in Singapore are selling Melbourne inner-city properties in Southbank, Docklands, Queen Victoria Market or Flinders and Spencer Street in the CBD. Go to any website and you will likely see advertisements on a property fair featuring these CBD properties. Many local investors buy into the advertisements without fully understanding the situation on the ground. I have already said my piece in an op-ed written last year after making a business trip there. (http://www.runningstream.com/staff-blog/on-the-ground-in-melbourne).
If you aspire towards financial freedom, or have an interest for investments, chances are, that you will be heading down to the investment fair this weekend at Suntec City.
I will say one thing about investment fairs. They are a great place to learn new things and about products. It is a great training ground for people in the sales line. Investment fairs are places where many people with hopes and goals of financial freedom seek out instruments to help them achieve that goal. However, it is also a place where nightmares are born and where some people have their dreams of financial freedom stolen from them. In this short post, I hope to encourage would-be investors to have the right mindset when deciding how to deploy their hard earned money and to be vigilantly skeptical.
A cloudless blue sky and bright sunshine greeted us upon our arrival into Coolangatta airport in the Gold Coast. It has been 2 years since I last step foot on Australian soil but the beautiful weather at least has not changed. Memories of good times spent on the Gold Coast during semester breaks from the university came back to me in a wave of nostalgia.
We were back in Aussie to meet with old and new developers, check on completed projects and look for interesting new projects in both Brisbane and Melbourne. Without further delay, we packed into the car and were on our way to Brisbane.
I love Australia and I love Melbourne so I just cannot help but find an excuse to get out of Singapore (and the office) to head to Melbourne whenever I can. This trip, I am pleased to announce, was for accepting my offer for the Australian PR and to assist a client with one of his acquisitions in Melbourne. I’ve also managed to snivel a few more days of working leave to do some scouting and surveys of interesting areas in Melbourne.
My main objective was to check out some hot spots for property investing. We’ve all spent many hours on research here in RunningStream. Now, I will be heading to the suburbs to see if the situation on the ground reflects the numbers and our expectations. I spent about 4 days driving around to visit different sites and around different suburbs to see how each of them are developing and growing.
2014 has seen a very clear shift in focus from prime London to secondary London and beyond. An unexpectedly robust pick up in the UK economy has been translated in to a surge in confidence for the broader housing market. With the Government’s Help to Buy scheme having kick started much of this last year, the UK housing market has seen around 10% growth in prices since last summer (Nationwide today report 11% August to August).
The momentum looks likely to carry through this year but with base rates set to rise most probably in early 2015 and the Government’s efforts to prevent an overheating market (MMR rules etc.) the signs point to price rises at a more moderate level in the near term but most likely back to their long term, pre GFC average of around 5-6% pa over the next 4-5 years.
Melbourne is an excellent place to go for a holiday and wonderful place to be living in. There’s a nice mix of city life and country life. What appeals to the Singaporean in me is the good food that can (almost!) rival us in variety and quality.
I’ve just returned from a holiday there. A holiday should be just that, all pleasure no work. But invariably, as a portfolio consultant, a trip to an area where we have client’s investing in will result in me putting aside a couple of days for work (It’s a good thing I have a patient girlfriend.)
One word comes to my mind the moment I had an unobstructed view of the CBD from the Queen Victoria Market: Oversupply. The number of cranes rising from the panaroma of the city is quite bewildering. What does all this mean for the local property market?