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RESIDENTIAL MARKET UPDATE –FOREIGN OWNERSHIP LEGISLATION UNDER REVIEWFOREIGN OWNERSHIP LEGISLATION UNDER REVIEWPresented by: Marc Townsend - Managing DirectorSeptember 19, 2013

CONTENTS1 THE ECONOMY1. THE ECONOMY

2. RESIDENTIAL MARKET – A BUYER’S GUIDEA BUYER S GUIDE

• Price/Payment terms

• Location/Accessibility

l C• Developer/Contractor

• Legal

• New Launches

THE ECONOMYTHE ECONOMYMOVING IN THE RIGHT DIRECTION

ECONOMIC OVERVIEWGold and Bank Deposits Become Less Attractive

Global gold price: decreases 2,00050 g p18.1% YTD.

Local gold price: reached its bottom in June (down 22%) and

1,400

1,600

1,800

38

42

46

obal

gold

price

(US$

)

old p

rice (V

ND m

illion)

bottom in June (down 22%) and currently down 19.7% YTD

Deposit rates: 800bps reduction over the last 18 months

1,000

1,200

30

34

03/2012 06/2012 09/2012 12/2012 03/2013 06/2013 09/2013

Glo

Local

go

LOCAL GOLD GLOBAL GOLD

425

CPI (y-o-y, Vietnam) Rediscounting Rate Refinancing Rate CPI (m-o-m, Vietnam)

Inflation surged

over the last 18 months.Source: SJC

1

2

3

10

15

20

% m

-o-m)

Intere

st rat

es (%

)

Monetary expansion

-1

0

1

0

5

10

Nov-10 Feb-11 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Nov-12 Feb-13 May-13 Aug-13

CPI (%

CPI (%

y-o-y

) /

Monetary contraction Inflation controlled

4 HOME SWEET HOME| Q3/2013

y g y g y g

Source: State Bank of Vietnam

ECONOMIC OVERVIEW

Regional stock markets,

Stock Market Recovers, Real Estate to Come Back into Focus?

y-o-y return as of Sept 18, 2013:

Thailand (SET) up 16.6%;

Si (SGX) 9 2% Singapore (SGX) up 9.2%;

Indonesia (JCI) up 8.5%;

Vietnam (VNINDEX) peaked at Vietnam (VNINDEX) peaked at 528 points in June, up 26%, but dropped back to 14.0%.

Source: Bloomberg

REAL ESTATE INDEX 2Y 1Y 6M 3M 1M Current

Real Estate Holding & Development Listed Companies

48.8 43.6 41.9 45.4 41.3 41.5

Real Estate Services Listed Companies 75.6 54.4 24.4 26.6 23.8 21.1


Source: Stockbiz

DASHBOARD

Vietnam Economic Indicators Banking & FinanceECONOMIC

2Y 1Y 6M 3M 1M C tBANKING &

2Y 1Y 6M 3M 1M C t

Produced monthly by CBRE Vietnam

ECONOMICINDICATORS

2Y 1Y 6M 3M 1M Current

CPI (%) y-o-y 23.02 5.04 7.02 6.36 6.81 7.5

Trade balance

BANKING & FINANCE


VN-Index 398.3 396.0 474.6 518.4 485.7 473.3

USD/VND (inter-bank)

20,828 20,828 20,828 20,828 21,036 21,036Trade balance (US$, bil)

(6.2) (0.2) 0.4 (1.7) 0.2 (0.3)

Retail & services Turnover (VND,

169.2 190.2 212.7 215.5 213.3 217.2

Local gold (VND mil/tael)

46.78 44.42 43.24 41.10 38.27 38.65

Lending Rate (%)* 20.7 14.8 15.5 15.3 13.2 13.2

Deposit rate (%)**16 8 10 9 10 5 9 6 8 4 8 4

Real Estate Companies New Launches(***) (Condominium for sales)

( ,tril)

p ( )(1-year term)

16.8 10.9 10.5 9.6 8.4 8.4

Source: GSO Source: GSO, SBV, SJC & HSX

p ( ) ( )REAL ESTATE INDEX


Real Estate Holding & Development Listed C i

48.8 43.6 41.9 45.4 41.3 41.5

NEW LAUNCHES 2Y 1Y 6M 3M 1M Current

HCMC New launches (unit)

6,993 4,674 2,523 2,246 1,186 885Companies

Real Estate Services Listed Companies

75.6 54.4 24.4 26.6 23.8 21.1

launches (unit)

HN New launches (unit)

19,660 9,003 3,460 1,963 1,338 842

Source: Stockbiz Source: CBRE(*) Current lending rate is the average lending rate surveyed at ten banks, applied for home loan only. The back-dated numbers are the average rate which was announced


publicly at that point of time, applied for all sectors and all banks . (**) Deposit rate is the average deposit rate of a basket of ten banks in which the rates are announced publicly on their websites and can be tracked backwards.(***) New launches is the number of units that were released to the market by developers and calculated on a monthly basis .

NEWSPAPER ADVERTISEMENT UPDATE - HCMC

Ad ti d b Di t i t HCMC YTD 2013 Ad ti d b M th S th Vi t * 2013

Produced weekly by CBRE Vietnam

Advertised by District, HCMC, YTD 2013 Advertised by Month, Southern Vietnam*, 2013

125

150

25

30

ments

ts18%15% District 7 District 9

25

50

75

100

5

10

15

20

umbe

r of a

dvert

isem

Numb

er of

projec

t

11%

7%7%5%5% Thu Duc District 2

Nha Be Tan BinhGo Vap Tan Phu

0

25

0

5

Mar Apr May Jun Jul Aug MTD Sep

Nu

Number of projects Number of advertisements

11%

8%7%7%7% District 8 Binh Tan

Others

Source: CBRE (*): HCMC, Binh Duong and Dong Nai, BR-VT


Developers spend more on adverts. Sharp increase in bothnumber of projects advertised and number of advertisements.


NEWSPAPER ADVERTISEMENT UPDATE - HANOI

Advertised by District Hanoi YTD 2013 Advertised by Month Hanoi 2013

Produced weekly by CBRE Vietnam

Advertised by District, Hanoi, YTD 2013 Advertised by Month, Hanoi, 2013

200

250

20

25

30

emen

ts

cts27%6%4%

Hoang Mai

Tu Liem

50

100

150

5

10

15

20

Numb

er of

adve

rtise

Numb

er of

projec

11%

5% Ha Dong

Cau Giay

Thanh Tri

00

5

Mar Apr May Jun Jul Aug MTD Sep

N


24%16% Thanh Xuan

Others

Source: CBRE

Affordable projects continue to dominate advertisements in Hanoi


ECONOMY EASES, PROPERTY MARKET IMPROVES,

Current economy• Inflation stayed soft

R f th t k

Residential market will again becomes attractive to Vietnamese investors as other• Recovery of the stock

market• Interest rates cut• Local gold price

decreases The next round of

Improving infrastructure will facilitate the property market

investors as other alternatives (gold, stock market, deposit accounts) offer limited returnsdecreases

• Establishment of VAMC

The next round of interest cuts proves to be one of the most decisive in improving residential purchaser

ti tsentiment

By 2014 the residential market will have passed the bottom


RESIDENTIAL MARKET – REGIONAL COMPARISONHCMC gains its competitiveness in the region

356 000

25

30

35

5,000

6,000

per m

onth)

psm)

15

20

25

3,000

4,000

Rent

(US$

psm

ling P

rice (

US$

5

10

15

1,000

2,000

Buy-t

o-let

RSell

0

5

0

1,000

Bangkok Manila Kuala Lumpur Jakarta Ho Chi Minh City

Average Selling Price Average RentSource: CBRE


RESIDENTIAL MARKETRESIDENTIAL MARKETA BUYER’S GUIDE

VIETNAM RESIDENTIAL CYCLEAre we out of the stagnancy?

Peak property market and Since 2009: Hard hit by global

2007-2008PEAK

Peak property market and prosperous economic situations Speculators dominated the

market. Large unit size preferred:

y gand local economic uncertainties

The Vietnamese economy started slowdown negatively impacted the property market

Large unit size preferred: 2 BR: 80 - 90 sm 3 BR: over 100 sm

p p p yspeculators quit the market.

2009-2010Mixed story

Since 2011: macro-economic uncertainties lack of cash.

S ll it i f d

2004-2006Frozen

Smaller unit size preferred because of the limited budget

2 BR: 60 - 80 sm 3 BR: over 90 sm

20132011-2012Stagnant


A BUYER’S GUIDEWhat to consider when buying a home?

PRODUCT

PRICING

PRODUCT

Legal Others


A BUYER’S GUIDE - PRICE“High-end” has become middle-class housing

Units Sold by Segment, Q1/2013 Units Sold by Segment, Q2/2013

03%

Luxury High-end Mid-end Affordable

“00%

Luxury High-end Mid-end Affordable

30%42%

Affordable units continued to be the most-sought after.

More units sold in high-

40%43%

26%

Average selling price (US$/sm)

gend segment y-o-y thanks to more attractive payment terms plus incentives

17%

incentives.

”Source: CBRE

1,500

1,800

2,100

e US/

sm)

High-end Mid-end Affordable

600

900

1,200

1,500

2008 2009 2010 2011 2012 2013

Avera

ge pr

ice


2008 2009 2010 2011 2012 2013

A BUYER’S GUIDE - PRICEIs there a real price cut?

Sunrise City Project Phase 1 – South Towers Phase 3 – North Towers

Location / ViewBy Rach Bang Canal Cooler air

City view Him Lam residentialLocation / View Cooler air

Phu My Hung view Him Lam residential area

Price VND40-50 mil psm VND23-30 mil psm

Hand-over condition Semi-furnished Bare-shell

No. of Units/floor 4-6 units/floor 11 units/floor (Block X2)

Main contractor Kumho 1 Hoa Binh Corp.

Status In operationUnder constructionExpected completion: 2015


Expected completion: 2015

A BUYER’S GUIDE - PRICEProjects with improved payment schedules & reduced interest rates

Tropic Garden District 2 Xi Riverview Palace District 2

The Estella – District 2

• 719 unitsC t ki i $1 600 $1 800/

Tropic Garden– District 2

• 388 units• Current asking price: $1,100-$1,300/sm

• Good payment terms: hand-over when 50% paid, the rest payable with 0%

Xi Riverview Palace – District 2


• High discount: 18% if 98% payable

• Current asking price: $1,600-$1,800/sm

• Good payment terms: hand-over when 50% paid, the rest payable with 0% interest rate in 2 years

p , p yinterest rate in 3 years

SGC Nguyen Cuu Van– Binh Thanh


Imperia An Phu – District 2


• Excellent payment terms: hand-over when 10% 30% paid the rest payable

Him Lam Riverside – District 7

Current asking price: $1,000 $1,100/sm

• Good price and payment terms: 50% hand-over, the rest payable in 1 year with 0%

when 10%-30% paid, the rest payable with 0% interest rate • Free parking• Furniture package• Gym free for 1 year

• 314 units• Current asking price: $1,357 - $1,457/sm

• Good payment terms: 50% hand-over, the rest payable in 2 years with 0%

Sunrise City (North) – District 7

• 554 units• Current asking price: $1,119 - $1,428/sm

• Smaller unit size, lower price than P1,

Happy Valley – District 7

• 541 units• Current asking price: $1,500 - $1,700 /sm

• Longest payment schedule (30 months) in PMHF ki


• Good payment terms (54 months) –Central towers

• Free parking

Source: CBRE

A BUYER’S GUIDE - LOCATIONInfrastructure development will ramp up property values

The Vista

Thao DienPearl

Imperial An Phu

Future projects

CantavilPremier

E t ll

p j

Existing projects

Metro line 1


EstellaMetro stationSource: CBRE

A BUYER’S GUIDE – LOCATIONMetro Line No. 1, Saigon Bridge moving at pace

Metro Line No. 1 is making good progress


A BUYER’S GUIDE – DEVELOPERS/CONTRACTORS

Brands – a way to categorizey g

• Property developers and construction companies

• Helps to quickly and easily identify a property/service

• Sets levels for quality & standards

• International/national visibility & product knowledge

• Enhances value


A BUYER’S GUIDE – LEGAL ISSUESMore opportunities for foreigners to buy houses in VN

Current Law(Resolution No.19, effective 2009 - 2013)

Proposed Amended Law(effective 2014 IF approved)

Foreign Individual Buyers

YES with restrictions such as:• Individual investors who make direct investment

in Vietnam;• Expatriates at managerial positions;• Individuals who possess special skills that are

YES for all foreigners who have a visa to the country that is valid for at least three months

• Individuals who possess special skills that are needed in Vietnam;

• Individuals who are married to Vietnamese citizens;

Foreign ONLY foreign-invested companies operating in YES to all foreign investment funds, banks, Vietnamese gOrganisations

g p p gVietnam which are not in the real estate business but have the need to provide accommodation to their employees.

gbranches and representative offices of overseas companies.

Sub-lease NO YES

Product Apartments only. Apartments + landed property (less than 500 sm)

Number of Product

One unit only For individuals:• Option 1: Unlimited• Option 2: Limited to one or twoFor organisation:• Depend on the number of foreign employees it has

Maximum Lease Term

50 years • Option 1: 50 years with the possibility of another 50-year extension;


• Option 2: 70 years with no extension.

A BUYER’S GUIDE – LEGAL ISSUESHouse Foreign Ownership – Regional comparison

Thailand Singapore

YES with some restrictions:YES S i

Foreign Individual Buyers

YES with some restrictions: Holding a residency permit under Thai Immigration law. Permitted to stay in Thailand under the Investment

Promotion law (BIO) A foreigner or foreign entity remitting a foreign currency

into Thailand or withdrawing money from Thai Baht

YES Some important notes: They have to pay an additional buyer's stamp duty

(ABSD) on the higher of the total purchase price or market valuation. Only citizens and Permanent Residents of some

into Thailand, or withdrawing money from Thai Baht account of the persons residing abroad, or withdrawing from foreign currency account

countries which have signed free trade agreements (FTAs) with Singapore are exempted from ABSD.

Sublease YES YES for condo only

YES ith t i ti

Foreign Organisation

YES with some restrictions: Only joint-venture between a foreign and a local company

with at least 51% of share held by Thai Foreign juristic entity in receipt of a promotion certificate

under the Investment Promotion Law.

YES with higher ABSD rate

Product Condominium: as long as the building has not already sold its 49% foreign quota.

Condominium of a six- or more- storey. Landed house with condition: Approval from the Controller of Residential Property For accommodation purpose only.

Number of Product

N/A

Condominium: unlimited but a single foreign party cannot buy all the units in a condominium development without prior approval.

Landed house: 1


Maximum Lease Term

30 years with another 30-year extension 99-year lease

A BUYER’S GUIDE – LEGAL ISSUESNot quick and easy way out of reducing over-supplied market

“ Like first time buyers, retirees, up-graders,

Vietnamese overseas and newly married couples; y p

foreigners should be seen as a logical extension of

a maturing market, not just a quick fix.

Foreign buyers have been and will be following the

market carefully. They will be keen to buy when they

see the market turning round; and not before!

”g

”Source: Dung Duong, Associate Director, Research and Consulting Services, CBRE Vietnam


HCMC RESIDENTIAL MARKETNew High-end Launches – YTD 2013

The Prince Residence

Phu Nhuan District277 units by Novaland@ $2 000-$2 600/sm

Happy Valley (P1+P2)

District 7, 541unitsPhu My Hung Corp.@ $1 500/sm

The Vista (Tower 4)

District 2, 141unitsCapitaland + Phu Gia@ $1 400/sm - $1 700/sm@ $2,000 $2,600/sm @ $1,500/sm @ $1,400/sm - $1,700/sm

Sunrise City (North)

District 7, 182 units (total 554)by Novaland@ $1 119 $1 428/sm

Dragon Hill Residence & Suite

Nha Be District, ~150 units by Phu Long RE Corp. @ $1 190 $1 286/


@ $1,119 - $1,428/sm @ $1,190 - $1,286/sm

HCMC RESIDENTIAL MARKETNew Mid-end & Affordable Launches – YTD 2013

Sunview Town

Thu Duc District1,603 units (total) by Dat Xanh

Metro Apartment (Screc II)

District 2, 104 unitsby Saigon Corp. &

Nhat Lan 3

Binh Tan District240 units by BCCI

Ehome 3 P2

Binh Tan District161 units by Nam 1,603 units (total) by Dat Xanh

@ $520/smby Saigon Corp. & Hung Thinh Land @ $811/sm

0 u ts by CC@ $571 - $619/sm

6 u ts by aLong @ $794/sm

SGC Nguyen Cuu Van

Binh Thanh District , 104 unitsby SGC

Phuc Yen 2

District 12, ~234 units by Phuc Yen Co., Ltd.

Homyland 2

District 2, 425 units by Bao Son Co., Ltd.

Dream Home

Go Vap District, 518 units by Dream Home Co., Ltd.


@ $1,069/sm@ $767/sm @ $761 - $881/sm @ $567/sm

* Soft launch

NOTABLE CONDO PROJECTS TO LAUNCH BY 2016SORAGardens, Phase 2&3

Binh Duong New City

Becamex Tokyu Co LtdBecamex Tokyu Co. Ltd

~1,500 high-end condos (P1: 404 units)

SSG Tower

Van Thanh Str., Binh Thanh District

By SSG Van Thanh Corp.p

~78 high-end condos

Delta River Tower

Ton Duc Thang Str., District 1

Canh Hung HaiCanh Hung - HaiThanh JSC.

~163 luxury condos


VIETNAM SECOND HOME MARKETNORTHERN REGION

Provinces: Sapa, Cat Ba, Ha Long, HaiPhongPhong

Weather: 4 seasons

CENTRAL REGION

Provinces: Hue, Lang Co, Da Nang, Hoi An Quy Nhon Phu Yen Nha Trang DaAn, Quy Nhon, Phu Yen, Nha Trang, Da Lat

Weather: 2 seasons, mostly monsoons in Nov - Dec

SOUTHERN REGIONProvinces: Phan Thiet, Ho Tram, Long Hai, Vung Tau, Con Dao, Phu Quoc


Weather: 2 seasons – Dry: Nov - Apr; Monsoons: May - Oct

At CBRE, we live and breathe

Every week – NEWSPAPER UPDATESE th DASHBOARD

the business of real estate

Every month – DASHBOARDEvery quarter – QUARTERLY REPORT

For more information regarding this presentation please contact:MARC TOWNSENDManaging DirectorT +84 8 3824 6125F +84 8 3823 8418Email: [email protected]

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