Written by Administrator   
Tuesday, 07 March 2006

Residential Accommodation in Vietnam

In Vietnam there are a variety of residential accommodation types and styles available to suit all budgets and comfort levels, from no-frills apartments to sprawling villas. Residential property in the city can be broadly classified into serviced apartments, and houses – frequently also referred to as villas. Each group can be further sub-divided, broadly along rental lines, with the largest and / or best located, naturally, commanding the highest rental levels. Tho ugh Hanoi is the capital city, HCM City is Viet Nam 's economic, cultural, scientific and technological hub.

Ho Chi Minh City

HCMC has a rapidly developing economy, well educated population and modern facilities. Average municipal economic growth is forecast to be 11.5% in 2005, compared to the country's average over the past 10 years of 7.4%. Residence' average per capita income was US$1,800 in 2004 (compared to USD$420 nationally), and city authorities estimate that it will reach USD$3,000 by 2010

HCM City covers 2,095 sq.km, divided into 24 districts hosting an official population of more than 6.12 million. The southern business capital is a major transport centre, well connected by road, rail, water and air to the rest of the country, and internationally. The city has a network of rivers and canals spanning 2,900 hectares, which are convenient for both navigation and irrigation. The city's power, water and telecommunications are reliable. There are 14 industrial parks (IPs) and export processing zones (EPZs) in HCM City : Tan Thuan, Linh Trung 1&2, Tan Tao, Hiep Phuoc, Le Minh Xuan, Tay Bac Cu Chi, Cat Lai, Phong Phu, Binh Chieu, Tan Binh, Vinh Loc and Tan Tho i Hiep.

What most people (and maps) refer to as Ho Chi Minh City , infact only accounts for some 26% of the total area. The remaining 74% is basically split between the south-eastern mangroves & swamps of Nha Be , Binh Chanh & Can Gio Districts; and the northern-western low lands of Cu Chi & Hoc Mon. The city is undergoing ‘urbanisation' so rapidly, that by 2020 the 17 inner city districts are expected to have a population of 5.8 million to 6.4 million, while the suburban area will have 3 million to 4 million residents.

Between 1999-2004 Ho Chi Minh City's population experienced an increase of more than 1 million people or an average of 200,000 inhabitants a year, according to Municipal Economic Institure & the city's Planning and Construction Institue, which also said that migrants account for 30% of the city's 7 million people.

Serviced Apartments

International Standard

Ho Chi Minh City only has a combined stock of serviced apartments of about 2,000 units, an inadequate number relative to the ever increasing demand. Thus rentals have almost doubled in less than 5 years to the current levels. However, local investors have recently seen the investment opportunities available and are thus now rapidly filling the supply gap with a wide variety of new developments, both big and small. By the end of 2006, it is estimated that the number of units available will have doubled to over 4,000 units with several thousand more under construction. Tho ugh many of these are being built for sale on the local market (foreigners are unable to buy or sub-lease), many are being bought to rent to expats, at prices ranging from USD$800 – USD$2,700 per square meter, with a view to obtaining rentals from USD$10 – 30 per square meter per month.

However, given the relatively stable number of expats living in Vietnam, coupled with strict new foreign employment registration stipulations, and the dramatic increase in stock, one can foresee rentals falling to levels more in line with those of ASEAN regional competitor cities over the course of the next few years.

The largest and best located serviced apartment buildings with the widest range of facilities and services were constructed in the mid to late 1990's by foreign developers with deep pockets – typically USD$20+ million Joint Ventures. Since then, very few foreign investors have ventured into the domestic market. These ‘established' buildings have all had average occupancies of over 90% since @2002 and so are able to command premium rentals. Some offer short term accommodation (at upto USD$50 / sqm per month) but many have waiting lists and so are only interested in minimum 12 month contracts. The majority of these are in the ‘downtown' area but some are a 20 minute commute.

Local Standard

The other segment of the existing serviced apartment market is comprised of buildings with less than @50 units that are locally developed. Location and quality varies, as one would expect, but in common with their larger and more prestigious foreign invested counterparts, most have occupancies of over 90% and so are in a powerful position to dictate terms and conditions.

Although the many new domestic developments are being constructed for less than that which the foreign developers paid ten years ago, the standards are comparable, and since they own the ‘freeholds' they should be able to provide strong rental competition to the established properties – a fact not unnoticed to some, who are now desperately trying to sell long leasehold interests (to foreigners and locals) for the unexpired terms of the Joint Ventures, whilst rentals are at a ‘top' and before they fall.

Houses / Villas

Location is one of the most important factors when buying or renting a property. Certain districts are preferred by expatriates: the CBD (Central Business District) of Districts 1 & 3 and the greenery and clean air of the An Phu, Thao Dien, Binh An Wards of District 2 (just over the Saigon Bridge @15-20 minute drive). Other increasingly popular areas are in Tan Binh (around the airport @20-30 minute drive); and around the ever developing Saigon South area of District 7 (20-30 minutes drive).

Districts 1 & 3 (around the CBD)

There are 2 types of properties : Villas & Town Houses. Town houses are typically narrow 3 or 4 floors, straight up-and-down with the stairs in the middle with the ground floor used for parking and kitchen and maid accommodation. The size is usually never bigger than 5m x 20m. Villas are usually 2 floors high, wider (though most have by now literally been ‘chopped' down the middle), and more expensive to reflect their alternative commercial use (there is no restriction on use in Vietnam ). Very few of these still exist (in the private sector) and most have been converted into restaurants or coffee shops. Any front gardens have long since been chopped-off and sold / leased separately for street front retail.

District 2 (around An Phu)

The area on the far side of the Saigon bridge is, by Saigon standards, a ‘green & pleasant' land. Tho ugh still true, more and more of the ‘green' land plots (and they have all, frequently, been sold many times over by speculators) are now being developed into houses, with a few of the larger plots turned into apartments or more residential compounds. Several hundred expats (most with families) live in the area and there is the usual assortment of expat spin-off services and facilities: a supermarket, sports, leisure & recreation clubs. Most of the villas are two storey and from 700sqm to 1,500sqm gross, with usable areas range from @250sqm upwards, and many with swimming pools. Inside the various compounds, sizes are smaller but with the benefit of communal facilities and landscaping & security. Consequently, for those expats with ‘above average' budgets and a longing for some peace and quiet, amid what must be the noisiest city in the world, or with children, An Phu has deveoped a reputation since it still has some large properties with walled gardens or in landscaped compounds, that no longer exist elsewhere in the city.

Tan Binh District (around the Airport)

By Ho Chi Minh City standards, a relatively quite location - except of course for all the builders! Land prices are more expensive around the airport to reflect is proximity to Tan Son Nhat and the fact that the local infrastructure is set to improve this year with the USD$620-USD$930 million development of a metro line and the up-grade of the ‘airport road'. The houses tend to be larger and with far too many rooms for most people. A tiny percentage even have small gardens. Especially popular with the Korean community and the usual international diaspora of expats working in the freight forwarding & logistics type industries.

District 7 (around Saigon South)

The formation of the Saigon South urban area on 2,600 hectares is meant to create conditions for urban and rural districts in the surrounding areas of District 7, District 8, Nha Be and Binh Chanh to develop. With the (at long last), construction of a couple bridges, Saigon South is no longer only accessible via the inadequate Kinh Te bridge by the Saigon Port. It is now possible to travel from the Phu My Hung (PMH) New Residential Area (often referred to as Saigon South) to the CBD in 15 minutes. After years of relative inactivity, the 600 hectare @USD$250m PMH Joint Venture have started construction of the first of many planned apartment buildings and houses. Several international schools; the Franco Vietnam hospital; RMIT (Royal Melbourne Institute of Technology) University; and other such ancillary service suppliers & facilities have also committed to a future amongst the landscaped greenery. The government have now also approved the construction of the 1,950m long USD$114m Phu My bridge, that ill connect the city ring road (that runs through PMH) with the CBD via the 770 hectare USD$632m Thu Thiem New Urban Area of District 2. Apartments are being sold from @USD700/sqm and appearing on the secondary market to rent from USD$500/month upwards. Villas cost upto USD$500,000 and rentals start from USD$1,500/month

Hanoi

Hanoi is a relatively small province (921sq.km compared with HCMC's 2,095 sq.km) with 12 Districts : Soc Son, Dong Anh & Gia Lam - northeast of the Red River (663 sq.km) - and Tu Liem, Thanh Tri, Tay Ho, Cau Giay, Thanh Xuan, Hai Ba Trung, Dong Da, Hoan Kiem and Ba Dinh – of which the last 7 represent the central and ancient core (84 sq.km)

This central part of Hanoi is densely populated with about 1.5 million people and the Director of the local Management of Urban Projects recently said, "There is nowhere in the world like Hanoi with houses less than 10 square metres or 1 metre wide." The residents of these extraordinary houses that are deemed too thin and poten­tially dangerous are now being be encouraged to either sell up to their neighbouring owners or hand them over to city authorities.

A recent survey by the Hanoi 's Land & Housing Service stated that the majority of 4-6 storey apartment blocks in Hanoi were in serious states of disrepair. Many of these blocks were built in the 1960's and 5% must be destroyed as soon as possi­ble, while 62% are in need of upgrades. Hanoi has 67 residential areas, of which 42, with a total area of 53,500 square metres, are on the list for urgent improvement. The main rea­sons for the deterioration include illegal changes to the designs (expanding) and sinking caused by weak foundations. In a recent "Housing Environ­ment & Basic Environment in Hanoi ? seminar, experts said that about 40% of Hanoians are living in houses in a poor condition and with a bad environment. The seminar was the first one to discuss the environ­ment of people living in the old residential quarters and the ancient streets of Hanoi . No sunlight, not enough fresh water, regular flooding, no playgrounds for children, and no easy access for firefighting services were considered the main problems. An area of particular concern was Hanoi 's Old Quarter, which was established in the 11 th Century on an area of only 180 hectares but occupied by more than 85,000 resi­dents. The capital city's population has increased remark­ably in recent decades. The city was home to more than 3 million in 2004, with an average density of 17,868 people per kilometre. How­ever, this rate is much higher in the central districts. The most densely populated is Hoa n Kiem District and especially Hang Bo Commune. The high density popula­tion results in the fact that each person in these areas have an average living space of only 2 square metres. This has hit the city's infrastructure system hard, especially in the Old Quar­ter, where many generations still live in the same house together. Many families often share just one toilet and an alley only 1 metre ­wide. The city's outdated fresh water supply pipeline can only satisfy 40-50% of demand, while the drainage system in these living quar­ters is a major cause of local environmental pollution.

Serviced Apartments

Hanoi only has a current combined stock of serviced apartments of about 1,400 – which is around 600 less than in HCMC. Most of the units are in foreign invested joint venture buildings and over 5 years old – which means that they were / are 1 st Generation property investments. Because very few new units have been added over the last 5 to 10 years, vacancy rates have always been low and there has / is / will always be a large core of affluent expatriates eg diplomats & country managers, living in the capital city, who demand and can afford Grade A type serviced apartment accommodation.

Occupancies have been over 90% at all of the larger established, foreign apartment properties since about 2002, which in many respects should be regarded as full occupancy, given the transitional nature of most expatriates employment in Vietnam; the short term nature of leases in Vietnam and with many properties even offering daily rates; and due to on-going maintenance and improvement programmes. Rental rates are therefore high, and given the absence of significant additions to the total stock for a few more years, look set to rise even more as demand for city centre accommodation will continue to far outstrip the supply.

However, for those willing to live a 10-20 minutes drive from work in a central office building, the market could slow down a little, with the opening of the Manor's 500 units and Ciputra International City's first 300 apartments & 400 villas, much of which, although being sold off on the local market, will reappear on the secondary market, as investors seek a rental return on their investment.

Several other apartment buildings like Elegant Suites on Quang Turng (44 units being locally developed); the USD$40 million Pacific Place on Ly Thuong Kiet in Hoan Kiem (191 unit project originally licensed in 1994 as a five star hotel to a joint venture between Ever Fortune Industrial of Taiwan and two Vietnamese companies); the 80 unit Skyline Building on Truc Back Lake adjacent to West Lake; and the DMC Building opposite the Daewoo Hotel in Ba Dinh; the 26 floor ICC Building on Nguyen Chi Thanh in Dong Da, and Syrena on Xuan Dieu in Tay Ho, are due to open soon, some of which are being sold off on long term leases for a capital sum, with the ‘sub-investors' oftern buying to lease.

Other residential developments due to start soon are the USD$80 million Golden Westlake Executive Residences, (375 units & 16 villa Ha Viet-Tung Shing Joint Ven­ture between Tung Shing Group of Taiwan, which is contributing 70% of the capital and Ha Noi Leather and Footwear & Viet Tien Garment companies), and the USD$115­million Hanoi City Complex - which is scheduled for completion in 2009. The new supply of internatonal standard apartment accommodation will be about 2,000 unts in 2006 and 750 in 2007 and 500 in 2008.

National Overview

It is often said that land prices have never fallen in Vietnam . The rampant speculative ‘land fever' of the last 5 or so years has, to a degree, been controlled by the new Land Law and its implementing Decrees. However, though ‘frozen', prices have yet to be adversely affected, partially because prices are quoted in gold taels and partially because the vast majority of buyers are prepared to pay a premium to become home owners. For those with the resources to buy several houses and / or land plots, the pressure is now on to build / redevelop, in accordance with the new legislation, that is attempting to end the speculative trading in undeveloped land plots. Tho ugh prices remain very high – Vietnam is often cited as having the highest land prices in world relative to GDP – the Vietnamese population's appetite for real estate remains unaltered (in common with their Chinese counterparts), despite the apparent overvaluation, as compared against bank interest rates. This can best be demonstrated by the fact that most (state employed) families are only able to afford to buy one-third of one square meter of an apartment each year (Asian Development Bank Survey 2004).

Since construction costs are so small in comparison with land prices and because the government have now prevented undeveloped land trading, the result is an orgy of residential construction throughout the city, with almost every road and alleyway being temporary home to one or more gangs of construction workers. Also because of the high price of land, owners develop as much of the site area as possible (frequently 100% of the surface area – albeit in contravention with local laws and decrees and guidelines), and / or chop their land into ever smaller parcels. Typical unit sizes are 5m x 20m, developed into 3 to 4 storeys, and almost invariably with the stairs situated in the middle, thus making sub-division virtually impossible. To illustrate this, a recent news report referred to a road that had “gradually lost its beauty due to the construct­ion of at least 20 narrow houses with an area of less than 20 sqm each…….Passers-by have been impressed by the three-sto­ried houses with widths of 1m and depths of 10m.?

Many of these new houses are second or third homes and are being built to rent. Because there is no ‘cost to ownership' many of these landlords don't care if they rent their properties or not and so hold out for rentals of over USD$1,000 per month. Most avoid tax as well, so are seldom able to issue a VAT (Value Added Tax) receipt, and the few that can and do usually ask for tenants to sign two contracts: one for the property rental that excludes furnishings and which is low and declared to the authorities; and the other for the furniture, which is relatively high and is not declared. Rooms in some of these are available for @USD$400 per month, but are more akin to student bedsits than expat residences. Consequently, many expats with low budgets or who are ‘self-financed' (such as teachers) tend to gather amongst the cheaper 2 and 3 star hotels and backpackers that can negotiate food & washing packages.

Rentals

Whilst it is an economic fact in more developed and / or market economies ( * ) that demand increases / decreases to fall into equilibrium with supply, this has not happened in Vietnam . There are two main reasons for this. Firstly, there are very few capable large domestic developers (* * ) and the state owned developers either lack the capital or else are instructed to direct it elsewhere eg roads & bridges, low income / student / state employees housing. Secondly, because real estate is still regarded as a “sensitive? area, the legal rights of foreigners have remained severely restricted and unfriendly in comparison with, principally, China but also Thailand , India and other countries in direct competition for FDI (Foreign Direct Investment). Consequently, there have been very few large new buildings constructed to fill the demand-supply void and no foreign invested ones at all!

Because of the relative lack of any significant developments over the past five years occupancy levels have remained abnormally high, and so landlords' now typical seek annual contracts, and often also ask for / demand 6 months rent-up-front and / or a 6 month security deposit.

Rentals in both the main cities are in excess of USD$20 / sqm / month with the better / larger foreign invested buildings even above USD$30 / sqm / month +/- 10% VAT (Value Added Tax & @5% Management / Service Charge).

* Note – Vietnam is still regarded as a non-market economy by USA (see Appendix1), partially because of the real estate issue.

** Note – The 33 firms currently listed on the stock market have a total capitalization of only USD$230 million, with 11 having a total registered capital of less than USD$1.9m each. Over half are seeking to diversify into real estate development, partially because most of the products / services produced by them are / will be uncompetitive in the global context when Vietnam joins the WTO, and because most of them were former State Owned Enterprises who were ‘given' land well below market value when they were initially equitised eg Air-Conditioning manufacturer Refrigeration Electri­cal Engineering Corp ( REE ), the largest listed company and owner of e-Town office building.

Utility Costs

Most expat serviced apartments charge an all inclusive rent to cover electricity (typically USD$1/sqm/month), water, cable TV monthly fee, etc. However, for those renting houses, the rental is typically exclusive and the costs borne by the tenant and total costs are usually from USD$150 to USD$300/month, depending upon the size of the house and how often one uses air-conditioners and not including telephone calls. Maids cost about USD$75 to USD$150/month for cleaning, ironing, shopping and depending upon whether cooking in included and / or they ‘live-in' full time, and security guards are about USD$70 to USD$120/month per guard.

Short Term Future

Since the bottom of commercial property market cycle in 1999, when International Standard serviced apartment accommodation rentals were USD$22 per square metre a month, the average occupancy steadily increased to the point was reached since when average occupancies reached around 94%, which in many respects can be regarded as full occupancy given maintenance programmes, group bookings, and periodic voids. Naturally, rentals have and still are increasing to exploit the current demand-supply imbalance.

There are an increasing number of foreign­ers interested in owning condominiums, especially close to the city centre where many perceive that rentals and values will continue to increase and remain consistently strong. However the unavailability of any legal rights ‘in' condominiums (as opposed to leasehold contractual rights ‘over' property), have sufficiently deterred most such potential foreign buyers from investing.

New Supply : International Standard Serviced Apartment Accommodation

HANOI (Units)
HCMC (Units)
2005
1,300
3,450
2006
2,100
6,675
2007
1,200
5,325 (Inc Saigon Pearl )
2008
1,000
8,000 (Inc Keppel's Sports' City)

Ho Chi Minh City

Average asking prices
USD$ / sqm

Developer
No. Units
% Pre-Sold
Lancaster
$2,200
Vietnamese
90
50
Pasteur Court
$2,300
Vietnamese
156
75
Manor
$1,700
Vietnamese
426
70
Saigon Pearl
$1,400 (wef June 06)
Hong Kong JV
700 Phase 1
60
Horizon Tower
$1,000
Vietnamese
200
70
My Vinh Tower
$1,400
Vietnamese
66
70
Grandview PMH
$1,500
Taiwanese JV
198
90
Avalon
$2,200 (wef May 05)
BVI JV
51
50
Orchard Garden
$1,460 (wef June 05)
Vietnamese
206
N/A
Indochina Park Tower
$1,800 (wef June 05)
Vietnamese
100
50
Saigon M&C Tower
$2,700 (wef 2009)
Vietnamese
200+
N/A

Hanoi

Average asking prices
USD$ / sqm

Developer
No. Units
% Pre-Sold
Ciputra
$600
Indonesian JV
316
40
Pacific Place
$1,800
Taiwan JV
185
90
Manor
$1,500
Vietnamese
450
75

Central Business District – CBD – Land Prices : -

City

Av Price-$/sqm

End Value-$/sqm
Yield
Remarks
HCMC
6,700
670
10
Limited number of transactions
Hanoi
5,500
680
8
Limited number of transactions
Bangkok
2,500
250
10
Manila
3,000
375
8
Hong Kong
49,500
4,125
12
Government land sale
Singapore
20,250
3,800
12
99yr lease of 1.8 hectare site

Medium Term Future

Hanoi

The capital's latest urban development plan envisages the city expanding on both sides of the Red River , so that by 2020 it can accommodate an extra 4.5-5 million people. To this end, t he People's Committee is seeking about USD$3.2 billion in investment capi­tal for 16 property construction pro­jects to 2010 to develop several new urban & residential areas, housing, trade centres, office buildings and transport facilities. From 2003 to 2010, the urban area is expect­ed to increase about 2-fold and the area and demand for housing increase 4.5-fold. One of the city's main targets is expanding to the north & north-west, and west & south-west, with a new 8,000 hectare new modern residential area to the north along the Red River being the main priority.

  • More than 200 residential projects are being built in Hanoi , which will create up to 10 million square metres of floor space by 2010. Most of these are small locally developed projects although there are several other large foreign invested real estate projects have been delayed for various reasons but are now showing signs of life : -
  • The USD$1.1 billion 148 hectare South Thang Long Urban project will cover four wards in Tay Ho & Tu Liem Districts. The developer has zoned about 30 hectares for ornamental trees including 3 hectares of peach blossoms and a 14 hectare reservoir.
  • American property group Magnum has expressed interest in developing a USD$1 billion residen­tial complex on a 400 hectare area in Dong Anh District around Vinh Ngoc & Tam Xa. Magnum is currently building a USD$24 million 5 star resort in Danang that is expected to open in 2006.
  • Ciputra International City has a total registered invest­ment of USD$2.1 billion. The Indonesian backed devel­opment is now completing the 1 st Phase comprising 400 houses and 300 apartments. ­Its developer, Citra Westlake City Development, plans to complete 50 apartment towers and 2,000 houses within the next 5 years.
  • The USD$236 million Northbridge Residential Project in Dong Anh has been on hold since 1998 after original foreign investor ran into financial difficulties. The 40-60% JV was between Thailand Northbridge Com­munities & Hanoi Construction Company No. 9.
  • The USD$240 million Red River City s also up in the air, as it is located by the Red River 's dyke system, where housing development has since been prohibited.
  • Luxembourg 's Coralis SA have proposed the Hanoi City Complex project that is awaiting a licence.
  • Up to USD$30 billion will be required to develop a 11,562 ­hectare urban town north of the Red River in Hanoi .

Ho Chi Minh City

More than 30% of HCMC's households have a living space of less than 36 sqm according to the housing management department under the Ministry of Construction although t he head of the HCMC Architecture Association recently said that over the last 30 years the number of buildings in HCMC has grown 3-4 times. This is expected to grow by 4-5 times by 2020 wile the minimum per capita area for each resident is estimated to increase to 40 sqm. Currenlty the per capita average area is 7-8 sqm. With this rapid urbaniza­tion, HCMC will have to develop 5 million sqm of housing a year to 2010 to increase the total floor space to 100 million sqm by 2010. If this comes true, each person's housing in the country's largest eco­nomic center will rise to 14 sqm by 2010 from the current 10 sqm. The Service of Construction say most of the city's low and medium income residents do not own a house so the HCMC authorities have set a target of building 80,000 apartments for these people, with 10,000 units reserved for the poor to rent and the rest for sale on deferred payment terms. Ac­tually, this figure can only meet one-third of the demand so to translate the target into reality, the city has embarked on a number of key programs, including relocating people living in makeshift houses along Tau Hu, Ben Nghe, Tan Hoa , Lo Gom, Cau Me, Tham Luong and Ben Cat canals. These people will need around 6,000 apartments. Another 4,700 apartments will have to be built in resettlement areas like Vinh Loc, Phu My, Long Thanh My, Ba Diem and Thoi An to house families relocated from temporary resi­dential areas and the city will need to re­build or repair 100 deteriorat­ing apartment buildings. To better illustrate the point, a recent inspection conducted by the Saigon Construction Quality Control Company under HCMC Construction Department warned that 30 out of 45 high rise apartments in District 10 could collapse at any time. Most of these residential complexes were built before 1970 and more than 4,000 people currently live in these apartments. The Service of Agriculture & Rural Development is also working on a program to build 40,000 new apartments in the outskirts and estimate that by 2010 at least 60% of students and migrant workers from other parts of the country will need 43,000 rooms – to accommodate 4 people each. These new residential areas will require some 1,000 hectares but figures from the Ministry of Construction estimate that between 2005-2010 HCMC's hous­ing development projects will swallow up USD$3.35 billion, of which the city's budget can only cover @17% excluding @USD$1 billion for site clearance, com­pensation & infrastructure development. Commentators say that the city should only keep some of the ubiquitous “tunnel houses? and redevelop the rest as they occupy too much land. The density of these houses is very high and they account for between 60-70% of the city's buildings and most residents of these houses use their groud floor for trading purposes. The city is now home to more than 7 million people, and the figure is expected to reach 10 million by 2020. According to a recent Viet Nam Trade Union survey, government per­sonnel in HCMC can save @USD$220. Therefore, a state worker will theoretically be able to afford an apartment after @100 years. As one such employee noted, "I'm going to reach retirement age but won't be able to afford even one tenth of a flat with my sav­ings." Consequently, the current status quo marginalises the city's poor, forcing them to search for slum dwellings with young workers, particularly those in the military, worst affected.

Since 1997 city authori­ties have allocated 6,360 ha of land for 766 housing pro­posals made by real estate developers but only 400 housing units covering 1,400 hectares have been built so far. Recent figures from the HCMC Service of Construction show that around 180 apartment projects are under way in the city with about 15% of them high class / international standard. Some of the current & on-going development projects are :-

  • Thu Thiem Peninsula New Town : This project is arguably the most important for the city's future economic development (a bit like Shanghai's Pudong in this respect), as it will link the existing long French-established District 1 with the 770 hectares banana-palm covered swamps on immediately other side of the river. The new town comprises An Khanh, Thu Thiem & An Loi Dong Wards and part of Binh An & Binh Khanh Wards in the city's District 2.
  • Tay Bac Cu Chi / North West New Urban Area : This project covers 6,000 hectares in Hoc Mon District's Tan Tho i Nhi Commune - Tan Phu Trung, Tan Tho ng Hoi, Tan An Hoi & Phuoc Hiep Communes, and Cu Chi Town and is about 18 km long and from 3-5 km wide. Local authorities are hopeful that the it will become a modern ecological town; a city-level center in the north-west; a focal industrial zone; and a transit spot goods transportation as the north-western gateway. The master-plan envisages 1,300 hectares of greenery & 700 hectares of ponds to con­trol the water-levels of local canals & streams. Now, there are 30,000 people in the area but it is estimated that the population will increase 10-fold after the area is developed.
  • Tan Da - Binh Quoi Peninsula : This near ox-bow lake covers @300 hectares and is infact a virtual island as it is physically separated from the rest of Binh Thanh District by a river channel. There are two small, inadequate bridges over the river, both of which feed into the single a road that runs in a loop around the circular shaped island. Although there are proposals to build another bridge on the eastern side of the island, that will allow traffic traveling along the Hanoi Highway an alternative route into the city centre, these seem unlikely to materialise in the short to medium term. The primary access road is Xo Viet Nghe Tinh, part of which has recently been upgraded to dual carriageway standard with a central reservation. However, the road deteriorates once over the bridge and actually on the island. None-the-less, District 1 and the Central Business District (CBD) is an easy 10-15 minutes drive as the peninsula is only 4.5 km away. There are long established @USD$1.3-2.3 billion plans to develop the Thanh Da peninsula into a new urban town with an emphasis on culture, sports, tourism & entertainment with 3 main sections : a resi­dential area with houses & orchards by the river; a com­mercial & tourism quarter with high-rise buildings; and a green quarter with golf courses & parks. The peninsula is presently @70% agricultural land with only about 3,000 houses.
  • Saigon Pearl : Situated on Nguyen Huu Canh in Binh Thanh District between District 1 and the Saigon Bridge / Highway No 1, the site is being developed by a 50%-50% JV between Hong Kong 's Vietnam Land & SSG Construction & Real Estate Company (Vietnam Land SSG Ltd) to provide 8No. apartment blocks of upto 37 floors and 2-4 officer towers of between 13-25 / 40 floors each & 126 villals. The 10.4 site on river opposite the Thu Thiem peninsula was acquired at action for USD$56 million ie @USD$540 / sqm and will be developed to provide a total of 2,112 apartments between 82-328 sqm. Viet Trang Import Export JS Company is heading a conglomerate of enterprises who have clubbed together to pay for the USD$156 million project. The Bank for Agriculture & Rural Development (BIDV) have loaned USD$32.3 million, accounting for 60% of the investment price. Vietnam Land is a JV between seven Vietnamese and a Hong Kong partner that includes the Sun Wah group and Japan 's Marubeni Corporation. Prices are being quoted at between USD$1,200-USD2,000 / sqm.
  • Bitexco Commercial Complexs : The Binh Minh Trade Import Export Company (Bitexco) is planning to develop two huge high rise office & apartment complexes covering about 10 hectares in the down-town areas of Ma Lang & Ben Thanh. The buildings will be between 40-55 floors and the investment required is estimated in the region of USD$460 million. More than 1,800 houses and 13 offices will be affected and compensation is anticipated to be about USD$80-100 million.
  • Saigon M&C Tower a.k.a Saigon Spaceship : At the end of 2001 Saigontourist bought out the foreign partner (Cibex International & Societe de Development Hotel Pointe des Blageurs) in the dead Joint Venture that was supposed to construct a hotel, office, shopping & apartment complex on arguably the most central site in Sai Gon – immediately opposite where the French colonialists had their flag-pole. A new @USD$30 million JV has been formed between Saigontourist (30%) and Saigon M & C Real Estate Co (60%) and Thu Do Land Company (10%), to develop the 6,000 square meter site. The revised plans are for a @USD$65 million 40 story office and apartment tower with some retail. The apartments will all have 3 bedrooms and range in size from 150 to 200 square meters and are provisionally being quoted at @USD$2,700 / sqm making the them the most expensive in the country.
  • Lancaster : Situated in the centre of District 1, the @USD$10 million 21 floor office and residential property is being developed by Trung Thuy Co to provide 90 condominiums of between 70-265 sqm. Prices are in excess of USD$2,000 / sqm.
  • Pasteur Court : Situated in District 3 on the airport road, the 21 floor USD$40 million property is being developed by Van Thinh Phat & An Thai Investment companies to provide 156 apartments with floor space of 83, 125, 137 and 142 square meters at prices between USD$138,000-USD$265,000.
  • Manor Place : Developed by Bitexco - probably the largest Vietnamese property developer to emerge in recent years - “The Manor? HCMC is a 100% Vietnamese invested prop­erty comprising 426 units, quoted at between USD$1,300-USD$2,000 / sqm. BIDV will lend up to 70% of the purchase price, repayable over 10 years.
  • Manor Officetel : This USD$35 million development is the Phase 2 of the Manor HCMC development and is being designed as a combination of office & residence space. The development, locat­ed on Nguyen Huu Canh street , will feature 456 units of between 35-50-148 sqm. The concept is that a business can use part of the apartment as office space during the daytime while lodg­ing in the other part with family at nighttime. The 1 st Phase will involve 426 units available for between USD$1,200-USD$1,700 / sqm.
  • Phuc Long Plaza : Ngoc Phuc & Intresco are developing the 1,231 unit complex in Saigon South covering 25,930 sqm near the Nguyen Van Linh-Chanh Hung intersection in Binh Hung Commune, Binh Chanh District. The 127,000 sqm development will consist of 4No. 16-22 floor buildings with units of between 54-125 sqm. The USD$44 million project is quoting from USD$470 / sqm.
  • Southern Seed Tower : The stock market listed Southern Seed Company is planning to invest USD$40 million to de­velop a 20 floor office & apartment building at 282 Le Van Sy Street in Tan Binh District, where the com­pany has its headquaters.
  • Saigon Jute Apartments : This 635 unit @USD$18 million project is being developed by the Saigon Jute JS Co & the District 4 Public Service Company to provide 3No. 18 floor residential buildings on the corner of Ton That Thuy et in Ward 1.
  • Botanic Towers : Situated in Phu Nhuan District, this 18 floor 268 No. unit residential development comprises apartments of between 88-93-110-112-147sqm priced at between USD$865-USD$950 / sqm.
  • An Binh Apartment : Developed by the Hai Long Service & Trading Enterprise, this USD$7.7 million project is situated in Binh Duong's popular Di An District, and will comprise a shopping centre, entertainment area & 504 apartments of between 43-84 sqm.
  • Kim Hong Apartments : Developed by HCMC based Kim Hong Company, the 200 unit 15 floor building covers a 2,950 sqm site on Vuon Lai in Phu Tho Hoa Ward in Tan Phu District. The Ground & 1 st floors are designed for retail with 208 residential units above, ranging in size from between 75-85 sqm. Prices are being quoted at @USD$475 / sqm. VIBANK & Techcombank are offering 60-70% loans payable over 10 years.
  • Phu Nhuan Apartments : This USD$10 million development is being constructed by the Phu Nhuan Construction & Housing Company on a 15,400 sqm site in District 12 and consists of 8No. residential blocks with 382 units. The apartments, in Thoi An Ward, are designed to accommodate those relocated residents from the inner city areas. The construction cost per square meter is about USD$252 and 1 sqm is predicted to sell for @USD$302. Phu Nhuan has promised to trans­fer @350 units from 1 st -8 th floors to the HCMC authorities & 30 ground floor units will be used for retail.
  • An Phu My My Complex : The An Phu area has long been planned as a new urban town covering 87 hectares in the heart of District 2. This USD$6.9 mil­lion complex would cover 2.3 hectares near the Hanoi Highway No. 1 and provide 33 villas in the 1 st Phase of between 140–214 sqm. Prices are being quoted at between USD$630-760 / sqm depending upon specification.
  • 161205-Work on a new residential complex with more than 70 luxury houses, a hospital and other infrastructure facilities started yesterday in HCMC's District 2. The project owner, said she hoped the An Phu ­My My complex would contribute to the development of An Phu area.
  • Cuu Long Condominium : Situated in Binh Thanh District, these units are being quoted at an average of USD$515 / sqm.
  • Hiep Phuoc Port Town : This 3,600 hectare development in Hiep Phuoc Commune in Nha Be District will turn a largely agricultural area in the city's suburbs in a port & industrial town. Korea's GS Group (formerly LG) Engineering & Construction is working on a plan to obtain various undeveloped land parcels throughout the city and including 360 hectares at Nha Be in exchange for building a 14 km expressway between Tan Son Nhat & Binh L o i worth USD$318 million that will help reduce traffic congestion and enable the further develop­ment of this new resi­dential area.
  • Horizon Tower : A new condominium that will provide in excess of 200 units;
  • Nguyen Van Cuu Complex : Situated in Binh Chanh District, the development will cover about 2.85 hectares of Binh Hung Commune and comprise 14 buildings including 6No 12 floor & 8No 14 floor office and apartment buildings. The first two floors are being designed for public services and retail with 856 apartments above from between 55-127sqm. The average price per unit is quoted at @USD$500 / sqm The project is being funded with USD$43 million from HCMC's Investment & Trading Real Estate Joint Stock Company (Intresco).
  • Hiep Phu Commercial Centre : Situated in District 9 about 15km from the centre of District 1, the property will provide 130 units on 10 floors above a retail podium.
  • Nanjing Overseas Engineering Company : Situated on a 37.7 hectare site in District 12's Tan Chanh Hiep Commune close to the Quang Trung Software Park , the developer has managed to obtain a 100% Foreign Invested Enterprise (FIE) licence to build 20,000 units for an investment of USD$88 million. The project will comprise 5-15 floor apartment buildings with prices of between USD$500-USD$1,000 / sqm.
  • Him Lam Trading Co Apartments – The company is planning to develop a USD$150 million 53 hectare residential complex in District 7.
  • Quang Trung Software City (QTSC) Villas : Situated on a 3,200 sqm plot inside the Quang Trung Software Park in District 12, the 16No. villas are a USD$1.3 million developed by the Lien Phuong Soft­ware Development Co (LP Soft) with AP Construction Company to provide decent accommodation for about 100 foreign information tech­nology (IT) experts working at the QTSC.
  • KNHC Developments : The Korea National Housing Corporation are preparing to build 60,000 apartments for sale to the low income people in the city. The apartments, with a minimum area of 50 sqm will cost from USD$10,000 to USD$15,000 / unit.
  • Conic-Phong Phu Apartments : The Conic-Dong Nam A apartment development is a 15 floor twin tower property consisting of 253 units of about 55 sqm for low income earners. Prices are about USD$22,000 per unit with half paid by installments over 18 months and the other half over 7-10 years. The project is the 2 nd Phase of a residential area called Conic-Phong Phu adjacent to the fast growing Phu My Hung new urban area by Linh Phong Construction Investment & Development Company (CONIC), to develop a 30 hectare USD$100 million project comprising 5No. apartment buildings; 500 villas & detached houses; and public facilities like a school; daycare center for children; clinic & commer­cial, sports & recreational centres. Conic-Dong Nam A con­sists of 3No. 12 floor blocks aside Nguyen Van Linh, which passes through Phu My Hung / Saigon South. This is the company's 2 nd apart­ment project in the area behind Conic-Dinh Khiem, which has 157 units. The next / 3 rd Phase - Conic­ Garden – will provide about 300 units.
  • Daewon-Hoan Cau Apartments : This USD$29.7 million 18 floor 50 year Daewon ( South Korea ) & Hoan Cau 51-49% JV will provide condominiums on a 3,562 sqm site on Dien Bien Phu in Binh Thanh District.
  • An Lac Apartments : Situated in Binh Tan District, this 300 units development by Saigon Realty Joint Stock Company is quoting from @USD$435-515 / sqm. Purchasers will normally be able to make staged payment over 7-10 years.
  • Thien Huon g Apartments : Situated in District 2 this 18 floor project is being developed by the same company that has developed the 93 unit 14 floor Saigon View apartments in Binh Thanh District.
  • Cantaville : Situated on 207 hectare in District 2's An Phu Ward 11 just the other side of the Saigon Bridge / Highway No.1, this USD$20.5 million property is being developed by a JV between ­Thu Duc Housing Development JS Company (40%) and Korea 's Daewon. The project comprises 3No 16 floor blocks with 390 apartments covering a total of 49,614 sqm with units sizes between 75-150 sqm. Prices are quoted at USD$980-USD$1,100 / sqm.
  • The Minh Apartments : Situated in District 2, this USD$9 million residential condominium is being developed between the HCMC based The Minh Construction Company & the British Virgin Islands' Jen River Park Incororation.
  • LCT Apartments : ASC-An Phu Development Company is developing a 17 floor USD$6.4 million office and apartment building on a 2,000 sqm on District 3's Ly Chinh Thang. The 1 st -2 nd floors will provide office space with 80 fully furnished apartments on the 15 floors above. The price of apartments is quoted at @US$1,500 / sqm.
  • September 23 rd Park : This long ‘dead' JV earned the pseudonym ‘The Black Hole' due to its scale and decade of inactivity. Located on 10 hectares of the 23 rd September Park that is surrounded by Cong Quynh, Pham Ngu Lao, Ton That Tung & Nguyen Trai near Ben Thanh Market, this 1995 70-30% USD$525 million Vijico JV (Saigon Cultural & Commercial Complex - SCCC), between Taiwan's Jin Wen Corporation and the Urban Development Service Company – UDESCO - (15%), the Public Park & Greenery Company (9%), and Ben Thanh Tourism Service Company (6%)/ went 100% locally owned in 2005 when SRECO (Saigon Real Estate Corporation) took over / were told to take over the foreign partner's stake in this long ‘dead' project. The JV envisaged developing a 5-star hotel with a 38 floor skyscraper, a 72,000 sqm commercial centre and many other state-of-the-art business & leisure facilities. In 2006, Korea's LG Engineering & Construction (LG E&C) negotiated a deal as an incentive as part of developing the new 14 km Tan Son Nhat-Binh Loi outer beltway new ‘airport road', the rights over a 1.2 hectares plot in the former SCCC JV. There are reports that they now plan to develop a mixed use commercial residential scheme on the site including a Xi (Extra Intelligent) Park Tower – one of Korea 's top serviced apartment brand-names.
  • Sing Viet City : This residential and sports complex in Binh Chanh District will cover about 300 hectares will consist of two sections along Xang Canal in Le Minh Xuan Commune. The developer is a USD$120 million Joint Venture between Binh Chanh Investment & Con­struction Company and four Singaporean companies : St Martin's Properties Pte, Science & Engineering Investment Pte, Techno Fibre (Singapore), and HRH Integrated Engi­neering Services Pte, who intend to borrow USD$70 million from banks. The local partner will make its capital contribution in form of land use rights valued at USD$15 million. Compensation for site clearance is estimated at USD$10.5 million or USD$3.5 / sqm.
  • Khahomex Tower : This stock market listed company is building a USD$6.3 million 15 floor apartment building with 330 apart­ments in District 4, on land prviously used for the firm's headquarters.
  • Chu Van An Apartments : Developed on a 6,500 sqm site in Binh Thanh District by Dat Phuong Nam , this 3No 18 floor USD$20 million apartment development will provide about 300 apartments of between 102-140 sqm. Prices are quoted at @USD$660-USD$820 / sqm.
  • My Vinh Tower : Situated in District 3, condominiums at the property are selling for between USD$1,350-$1,550 / sqm.
  • Gia Phuc Apartments : A property in Thu Duc District being developed by Construction Company No 8 with units ranging in size from 53-90 sqm and priced at @USD$380-USD$420 / sqm.
  • Hanoi General Construction Corp Apartments : A 15 floor USD$6.3 million development in District 2's Thu Thiem Peninsula covering 12,000 sqm with 500 units to accommodate people affected by the development of the peninsula
  • South Saigon New Urban Area : This huge project covers part of Ward 7 in District 8 - Tan Phong & Tan Phu Wards of District 7 - An Phu Tay, Phong Phu, Binh Hung & Hung Long Communes of Binh Chanh District, and has so far attracted 17No. foreign invested projects with a total registered capi­tal of over USD$850 million and 79No. local investors with @USD$685 million. In 2006, the People's Com­mittee approved the areas expansion from 2,612 hectares to 2,975 hectares. This addition / southern section has many advantages due to recent infrastructure improvements such as the Tan Thuan 2, Nguyen Tri Phuong & Nhi Thien Duong bridges, and the future 1,171m Nguyen Van Cu Bridge.
  • Phu My Hung (PMH) : The formation of the Saigon South urban area on 2,600 hectares is meant to create conditions for urban and rural districts in the surrounding areas of District 7, District 8, Nha Be and Binh Chanh to develop. After years of relative inactivity, the 600 hectare @USD$250 million PMH Joint Venture started have construction of the first of many planned apartment buildings and houses. Several international schools; the Franco Vietnam hospital; RMIT (Royal Melbourne Institute of Technology) University; and other such ancillary service suppliers & facilities have also committed to a future amongst the landscaped greenery. The government have now also approved the construction of the 1,950m long USD$114 million Phu My bridge, that will connect the city ring road (that runs through PMH) with the CBD via the 770 hectare USD$632 million Thu Thiem New Urban Area of District 2. Apartments are being sold from @USD700 / sqm and appearing on the secondary market to rent from USD$500 / month upwards. Villas cost upto USD$500,000 and rentals start from USD$1,500 / month. Several luxury housing projects providing several thousand units are now under construction including the Panorama, the Grand View, Nam Thien Luc Dia, Grand View 1 and My Tu 2. Purchasers can obtain loans from Vietcombank, Indovina Bank, and VIBank, who have agreed to offer 70% of the value over 5 years.
  • Avalon : Situated on an 800 sqm site in the centre of town on the District 1 & 3 boundary, the USD$$11million development is a Joint Venture between Singapore 's TCMC Developments Asia Pte Ltd (65%), and Phuong Nam Company (under the Ministry of Public Security – 30%) & Vinam (5%). TCMC is a wholly owned subsidiary of Qudos Asia Ltd, whose shareholders include Dragon Capital and HBP Project Management. The 14 floor property will have 51 units of between 103-207 sqm that are selling for between USD$2,100-$2,200 / sqm. HSBC, ACB and Sacombank are providing 50-70% loans repayable over 10-15 years.
  • Saigon North International (SNI) Oasis : The Oasis is the 1 st Phase of the 170 hect­are Viet-Sing Town in Thuan An District near the VSIP ( Vietnam Singapore Indus­trial Park ), in Binh Duong province that is being developed with Becames (Binh Duong Trading, Investmen t & Development Co). SNI expects people from Binh Duong , HCMC and other neighboring areas to buy prop­erties at the 9.3 hectare complex to relax on weekends or to rent out to foreigners. The Oasis contains 494 villas & shop-houses. The 280 sqm villas are quoted at @USD$95,000; the 232 sqm villas at @USD$63,000; and the 318 sqm shop-house at @USD$56,000.
  • Phuong Nam Plaza : Situated in the Saigon South new urban area, this USD$50 million property is being developed by the privately run Phuong Nam Company as 3No. 20 floor “U? blocks on a 6,000 sqm site. Phuong Nam are co-­operating with Switzerland 's Tradco Global Engineering & Construction on the project.
  • An Tuc Urban Area : An Dien Investment & Construction Company has signed a JV with Shih Da Global Holdings, registered in the British Virgin Islands, to develop a 26 hectare hous­ing complex in Binh Chanh District;s Tan Tuc. The USD$33 mil­lion project has legal capital of USD$10 million and is 60% owned by Shih Da with USD$23 million borrowed from banks.
  • Orchard Garden : Situated on a 8,700 sqm site close to the river in the expat villa area of Thao Dien in HCM City 's District 2, the USD$26.5 million property is being developed 50/50 between Hai An Housing Development-Trading-Production Co & Sacomreal (Saigon Thuong Tin Real Estate Co). The 206 unit project is a single building of 21 levels with the total available space of 42,292 square meters. Each apartment will cover 121-268 square meters and have 3-4 bedrooms and two outlooks. There are 125No 3-bedroom units between 3 rd -17 th floors at prices from between USD$1,000-USD$1,300 / sqm and 25No 4-bedroom units from 17 th -21 ST floors at prices from between USD$1,400-USD$1,560 / sqm. Purchasers can take out loans worth up to 70% of the apartment's value for a term of 20 years.
  • Song Da Apartments : This development is claiming to be the largest ever low cost apartment complex project in HCMC by providing between 30,000-60,000 units. The developer – a consortium headed by Song Da Corporation with the Eastern Asia Development Corporation (EADC) of the BVI ( Brit­ish Virgin Islands ) & RSW International Incorporation of Canada - is planning to develop a 28 hectare site in District 7 for the construction of 10-15 floor buildings. End sales prices are being quoted at between USD$190-250 / sqm for low income earners. The US Capital Group Corporation have expressed an interest to be financially involved.
  • Tan Tao Apartments : This 16.000 sqm complex will consist of 3No. 12 floors buildings containing 240 unitis in Binh Tan District, with quoting price of between USD$375-USD$440 / sqm.
  • Indochina Park Tower : Situated on the boundary between Districts 1 & Binh Thanh, the USD$5 million 84 unit office and residential property is being developed by Vietnam 's Indochina Group and the auditing and consulting firm AFC Saigon. Apartments are about 76 sqm each and prices are being quoted at around USD$1,800 / sqm.
  • Times Square : This long delayed Joint Venture between Larkhall and Savico will provide high end retail, residential and hotel accommodation on a 4,500 sqm site on Dong Khoi in the very centre of District 1.
  • Hoang Quan Plaza : Situated in the District 8 section of the Saigon South Urban Area, the USD$44 million complex is being developed by Hoang Quan (95%) and Lang Thanh to provide 9 high-rises of 15 to 18 storeys with 653 apartments of between 90-222 sqm, with 14,000 sq.m of office accommodation, and a 20,000 sq.m shopping centre on a 3.76 hectare site. The quoted price for apartments is between USD$1,200­-USD$1,400 / sqm and purchasers obtain 10 year 60% loans from the Mekong Housing Bank.
  • Nam Rach Chiec Residential Area : Situated in Dis­trict 2, the project is envisaged as providing housing for 5,500 households or 30,000 people on a 90 hectare site just over the Saigon Bridge / Highway No, 1. The Investment & Con­struction Authority for Thu Thiem Urbanized Area (Thu Thiem ICA) is borrowing money from the HCMC Investment Fund for Urban Development (HIFU) to clear the site. Finance for the further development of the area will be obtained through the auctioning of 10.6 hectares for apartment blocks; 12.4 hectares for villas; and 2.4 hectares for a shopping mall. The project also includes a kindergarten, school and clinic.
  • Asiana Plaza : The 13,600 sqm Kumho Saigon JV was licensed in 1996 to build a USD$223 million com­plex on the corner of Le Duan & Hai Ba Trung comprising a luxury apartment & office building with a 5-star hotel and shopping centre. Korea 's Kumho 65% stake was purchased by Saigontourist and the District 1 Housing Development Company in 2005.
  • Nguyen Phuc Nguyen Apartments : Situated on a 1,300 sqm site in District 3 close to the railway station, this USD$5 million 15 floor property will provide 68 units of between 75-183 sqm with ground floor retail. The two top levels of the building will be for pent­houses and the rooftop as a heliport. Quoting prices average USD$875 / sqm.
  • Savimex Apartments : As part of Savimex's diversification from wood processing into real estate, this 9 floor building will provide 180 units of between 82-120 sqm on a 6,300 sqm site in District 7 and include a kindergarten, shopping center and some space for sport activities.
  • Binh Phu : Situated on a 10,000 sqm site in District 6 about 45 minutes from the centre of District 1, the USD$19 million property is being developed by the local ASC (An Phu Service Production Company) to provide 520 condominiums of between 47-112 sqm with 6,000 sqm of retail space. The property is designed to have 5No. 19 floor tower blocks with 71,000 square metres of residential accommodation and 6,000 sqm of retail. Unit prices are quoted from USD$715-USD$820 / sqm. Vietcombank is offering 50% loans repayable over 10 years.
  • Tan Da Apartments : Situated in the bustling District 5, purchasers of units at this 21 floor USD$20 million Invesco JS Co & Viet Chi Hung Real Estate development can typically obtain 60% loans from Indovina Bank. The building comprises a 4 floor retail podium with 245 condominiums overlooking HCMC's China Town on the inter-section of the popular retail strip - Nguyen Trai – and Tan Da. The 78-100 sqm units from the 5 th -22 nd floors are being quoted from between USD$1,100-US$1,300 / sqm.
  • Rubyland : Situated on 7,000 sqm in Tan Phu District, the USD$18 million property is being developed by Tan Hoang Thang Joint Stock Company. The 19 floor building, in Tan Thoi Hoa Ward near the Tan Hoa-Lo Gom Canal , will have 280 units from 56-116 sqm and an international standard primary school, a sport facility, parks, a shopping mall, restaurant, cinema, coffee shop, games room, internet cafe, beauty salon and gymnastic facilities on the ground and first floors. Vietcombank are offering buyers 70% loans payable over 10 years. Quoting prices are about USD$570 / sqm.
  • Phu Tho Hoa Apartments : Situated on 6,000 sqm site on Luy Ban Bich in Tan Phu District, this USD$12.5 million project is being developed by Company 584 of Civil Engineering Construction Corporation 5 (Cienco 5) and will comprise 5No 15 floor buildings with 364 units of between 74-108 sqm. Prices are quoted at @USD$565 / sqm.
  • Gulf Golden S quare : This 30,000 unit Malaysian project has recently been approved by the local authorities.
  • Phu Tho Thuan Viet Estate : Situated in District 11, this Thuan Viet JV (Build­ing Materials & Construc­tion Company & Taiwan's Shuen Tien Construction) apartment complex, covers 29,000 sqm and comprises 4No. 16 floor buildings and includes a shopping center and roofed arch that reaches the third level of the buildings. The complex will have a swimming pool, a store that will be open round the clock and a garden surrounded by the apartments on the first two floors. From the third floor upward, there will be 195 units of between 62-124 sqm with those above the 3 rd floor with terraces. Prices for units from the 4 th floor upwards are quoted at between USD$55,000USD$126,000.
  • BIDV-M&C Holding Corp and the US Canada Australia LNG Fund Corp : These companies have agrred to join forces to develop USD$1 billion worth of housing for low income earners. In the first phase from 2005-2009, the alliance will build 30,000 apartments for sale to low-income people and resi­dents forced to relocate by socio-eco­nomic development projects. The apart­ments will be built in big urban centers complete with infrastructure and social facilities such as schools, sports & recreation areas, and hospitals. The centers will be located within 10-12 km from the downtown, in Districts 7, 9. 12, Nha Be & Binh Chanh. The tentative prices are USD$11,000-USD$12,000 per 1-bedroom 36 sqm unit; USD$14,120 for a 2-bedroom 45 sqm apartment; USD$22,450 for a 3-bedroom 72 sqm apartment; or USD$33,700 for a 4-bedroom 108 sqm unit. Buyers can get loans from BIDV equivalent to 70% of the apartment value and repay them over 10 years. To be eli­gible, purchasors must have worked in HCM City for 3 consecutive years and have a stable income of @USD$250 / month. Priority will be given to those working in the health, education and administrative sectors.
  • Vikamex Residential Complex : Situated on a 53,000 sqm site of Tan Kien Commune in Binh Chanh District, this USD$25 million project is being developed by Vikamex.
  • Hung Vuong Plaza : Situated in bustling District 5, the USD$33 million property is being jointly developed by local companies M&C Corporation and Kinh Do and will have two 29 floor towers with 276 apartments from the 8 th -29 th floors of between 117-128 sq.m. Kinh Do will occupy the first 7 floors of the plaza for a department store with luxury shops, offices, 20 restaurants and cafes, and five cinemas with a combined 1,500 seats. The Eastern Asia Commercial Bank (EAB) will provide 50% loans to purchasers repayable over 10 years.
  • Dong Tang Long Urban Area: This @USD$80 million project by the Urban & Housing Development Investment Corporation (Ministry of Construction) in District 9 will cover over 160 hect­ares.
  • Saigon Castle : Situated in District 7's Phu My Hung new urban area, this 20-40 floor mixed use retail, office & residential property covering 3 hectares was licenced in 2006 and is being developed between Housing Development & Trade Co and Korea's Hanseung Construction and Lucky Vietnam as a USD$200 million 80%-20% Joint Venture.
  • Saigon Sports City : Situated in District 2's popular An Phu about 5kn from central District 1, the project is being developed by Chiap Hua (Hong Kong) & Keppel Land ( Singapore ) to provide over 3,000 condominiums with office and retail / leisure facilities on about 75 hectares.payment terms. After the buyer makes a down payment, the bank will

Infrastructure Improvements in Ho Chi Minh City

 

In end 2002, while Vietnam was review­ing its economic performance and one year of implementing the trade agree­ment with the United States , there were news reports that American catfish farmers were in an advantageous position in the anti­dumping lawsuit against Vietnamese basa and tra fish processors. After a fact-finding tour in Vietnam, which took several weeks, a U.S. Department of Commerce (DOC) mission concluded in November last year that "Vietnam is a non-market economy." This is just an academic conclusion, but it will have a tremendous impact on Vietnam­ese exports to America in the future. Ameri­can law firms might use it as a pretext to file a lawsuit against any Vietnamese companies that sell goods at prices lower than U.S. mar­ket levels, especially items whose production is supported by the Government and whose prices are not decided by market forces. The issue has also sparked debates over the "success" of Vietnam 's economic reform pro­grams strongly supported by international fi­nancial institutions that often say in their re­ports or formal statements that Vietnam "rep­resents a successful transition to a market economy." Apart from the fundamental view that prices in a market economy are decided by supply and demand and are not influenced by administrative decisions, there are cur­rently neither international laws nor criteria for deciding whether a country is a market or non-market economy. The DOC conclusion on the status of the Vietnamese economy was based on the fol­lowing "specific factors" under Section 771(18)(B) of the U.S. Tariff Act of 1930 : -

1. The level of government intervention in the economy is still such that prices and costs are not a meaningful measure of value;

2. There are significant restrictions on the Dong's exchange rate;

3. Foreign direct investment is encour­aged, but the government still seeks to direct and control it through regulation;

4. The equitization of State-owned enter­prises and commercial banks has been slow, thereby excluding the private sector from ac­cess to resources and insulating the State sector from competition.

5. Private land ownership is not allowed and the government is not initiating a program for land ownership changes in this re­gard.

Criterion (1) is a basic factor to decide whether or not a country is a market economy. The other factors depend heavily on the defi­nitions provided in the Tariff Act of 1930. However, criteria (2) and (5) do not have good grounds . Vietnam can, in theory, be seen as a market economy as it meets the basic require­ments; for example, the prices of most prod­ucts are based on the law of supply and de­mand. Finding it necessary to switch to a market economy and ensure financial stability to re­store macro-economic balances, Vietnam be­gan economic reforms in 1989. The reform program has paid off. The key components of a market economy have taken shape, such as a free pricing system, a more dynamic pri­vate sector (responsible for 60% of all eco­nomic activities), an open foreign trade mechanism, and integrating big informal eco­nomic activity in formal market channels based on law. One of the special features showing the shift to a market economy in Vietnam is that infla­tion fell while economic growth was sus­tained. This experience is quite different from those in other economies in transition, such as Eastern European countries and the former Soviet Union , where economic activity slid and inflation rose. A major difference is that Vietnam avoided a big change in economic activity and massive layoffs. The measures for gradually spurring the private sector are characterized by the fact that dynamic com­panies were oriented toward profit while the country was seeking ways to reform most State-owned enterprises in key sectors (which had registered poor performance for years). In particular, the removal of restrictions on trade and the measures to liberalize the pric­ing system resulted in monetary incentives, which were almost absent in the centrally planned economy. This helped enhance the use of human resources, especially in the ag­ricultural sector. In the period, Vietnam in an effort to open its door to the outside world made a shift in foreign trade from Eastern Europe to regions with convertible currencies. The improvement in foreign trade caused a boom in foreign di­rect investment (in 1992-1996) and foreign aid. As a result, Vietnam is now able to main­tain foreign reserves at necessary levels while there were almost no foreign reserves before the introduction of the reform policy.

Conclusion : Regarding criteria (1) and (4) in the DOC report, Vietnam has made sig­nificant efforts to do these, but more time will be needed to complete them. Vietnam cannot satisfy criterion (5) although in reality, land and houses have been freely sold and trans­ferred and the property market has seen fast price hikes in recent years. In theory, Viet­nam can be seen as a market economy given that the prices of most products are based on the law of supply and demand, but it is still in transition toward a more advanced market economy and needs further restructuring . Meanwhile, the fixing of prices through regulatory measures or subsidies for a number of items are still seen in developed market econo­mies like the U.S. (steel and farm produce prices). Even China would be seen as a non-mar­ket economy if the five above criteria were applied to it . Therefore, there would be many anti dumping lawsuits against China filed by companies in the U.S. and other countries having trade relations with China . But no one has carefully considered the case of China although it has dominated trade in East Asia for years. Another noteworthy issue is that the de­lays in economic restructuring have resulted in the poor performance of the economy, which has in turn made economic growth lower than expected for years. Vietnam needs to speed up reform. However, for trade issues, Vietnam has sufficient evidence to reject the DOC conclusion that Vietnam is a non-market economy. SGTW 24 th January 2003.

Last Updated ( Saturday, 14 October 2006 )
 
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