The estimated capital injection into the Vietnamese property market reached US$5bn, mainly foreign direct investment (FDI). The British Virgin Islands for example invested almost $2.7 billion in Vietnam, while Singapore pledged $2.2 billion. The increasing interest in the city meant property prices in Hanoi tripled. New homes in Hanoi were being snapped up for $80,000 but by the summer this rocketed to $240,000.
Although the first months of the year were not the best for the citys property market, the more long term pattern is consistent, often exponential growth in property prices. Hanoi’s hotel and tourism market is developing rapidly, boosted by ever-increasing numbers of foreign visitors being carted into the country by more and more budget airlines like AsiaAir, Jetstar and Tiger Airlines.
The Hanoi Peoples Committee has given the nod to three five-star hotel projects in addition to five newly-licensed world-class hotels, with a total investment of US$1.2 billion. According to the Ha Noi Tourism Department, the three projects include the Marriot hotel, close to the My Dinh International Convention Centre, by the Bitexco Company, a hotel-office-villa complex on Doi Can Street in Ba Dinh District, and a hotel-office project on Tran Vu Street and apartments in Tay Ho District, by a company under the National Administration of Tourism.
Tourism breeds residents, and the serviced apartment market in the city has been bursting at the seems. The hitherto restrictive Vietnamese laws which at present, bar foreigners from owning property has contributed to limited supply and high rents (about $19 to $50 per sqm a month).
However, the governments promise to open up ownership laws to foreigners under certain conditions as and should see a large proportion of those living in serviced apartments turn condo buyers. This should help put a nervy to bed and return Hanoi to its previous growth pattern.