10 reasons why real estate investors pour money into apartments

Convenience, security, the ability to pay in installments, a variety of sizes and types, convenience for living, ease of sale and rent... are the attractive forces that make real estate investors in big cities not hesitate to pour money into apartments.

General Director of Nam Phat Investment Consulting Company, Nguyen Mac Hoai Nam, said that over the past 24 months, the liquidity of apartments from affordable to mid-range, high-end and luxury has continuously increased in the two largest cities in the country, Ho Chi Minh City and Hanoi. In Saigon alone, apartment consumption broke many sales records in the quarter and in the year. Notably, there have been many cases of investors buying large quantities of apartments in the market. Decoding the trend of pouring money into apartments, Mr. Nam said that there are 10 reasons for this investment wave.

First: The cost of buying an apartment is usually lower than a townhouse in the same location. This difference is quite large, on average the amount of money to buy an apartment is only about 30-50% compared to a townhouse. With the same amount of money spent, if you buy a townhouse, you will only get a normal, mid-range apartment, while an apartment is fully furnished and has good facilities, but you can still buy a car, improve the quality of life and raise the class of the owner.

Second: The internal facilities of the current apartment building are superior to those of the old generation of collective buildings or project townhouses. Almost all the necessary facilities for residents' lives are complete. For example: swimming pool, supermarket, food and beverage services, cleaning, beauty, sports, garden and convenient walking paths, community house. In addition, safe and convenient car parking while currently car parking is a difficult problem for many people living in townhouses.

Third: The apartment is protected and secured 24/7. This is something that many apartment residents and apartment investors appreciate. Especially for high-end apartments, security is a top priority. Not only is there an outer security guard, but now there is also an inner security guard, there must be an elevator card, the apartment has an outside camera, and there is a safe playground within the apartment complex.

Fourth: The apartment product basket is diverse, with many product types, many sizes, and can access a lot of reference information. Buying an apartment makes it easy to compare and choose the product that suits your housing needs or investment for rent.

The wave of investment in condominiums rose in 2014-2015 and broke many previous successful transaction records. Photo: KH

Fifth: Apartments are easy to sell in the secondary market because of their stable prices, which limits the situation of selling too cheaply or asking for too high a price, leading to the goods being stuck for too long and not being able to be sold. Meanwhile, townhouses are more difficult to survey, and prices fluctuate frequently. Even the appraisal certificates of many units for townhouses are very different.

Sixth: Buying an apartment and paying in installments over a long period of time is an attractive factor for investors because they can buy many apartments at the same time, and at the same time, they can transfer them at a moderate difference (a difference of a few tens of millions of VND per apartment) and still achieve the expected profit rate. For those who want to settle down, paying for an apartment according to the construction progress is easier to manage than paying in one go when buying other real estate.

Seventh: With the same investment level, the rental income of apartments is often higher than that of townhouses. For example, an apartment on Nguyen Huu Tho street with a price of 1.5 billion VND without furniture can be rented for about 7 million VND per month, but a townhouse in the same area with the same price can only be rented for 4 million VND. Or buying a townhouse for 5 billion VND (in a car alley) can be rented for 20 million VND per month while buying 2 luxury apartments for 5 billion VND can be rented for 25-30 million VND.

Eighth: Currently, the quality of apartment building construction has been greatly improved compared to a decade ago (2006-2007). Apartments have more reasonable and effective functions, diverse sizes, many affordable price ranges, smart design, good lighting and ventilation, and a new model of office apartments has also become popular. This progress, along with outstanding utilities, helps apartments reduce previous prejudices and negative feelings, so liquidity has increased sharply in the past 2 years.

Ninth: The revised Housing Law has expanded the conditions for foreigners and overseas Vietnamese to buy houses in Vietnam with the following rights: to buy, hire-purchase, receive gifts, receive inheritances and transfer. For the majority of foreigners as well as overseas Vietnamese, living in apartments is more familiar to them, meeting many criteria and quality of life that they are used to when living abroad. Therefore, apartments are chosen and consumed more by this group of customers.

Tenth: Apartments have easy access to credit packages and have many supports, preferential interest rates or rental commitments from investors. Apartments sponsored by banks will have quick and easy procedures and high loan rates. Townhouses are appraised by banks at low prices and loan rates are not as high as apartments, and the application review time is longer. Over the past 2 years, investors have competed to support interest rates for apartment buyers and at the same time committed to renting for the first 12-24 months at attractive prices to stimulate demand, contributing to increasing the purchasing power of this market.

According to VNE