Opportunities and Challenges in the Luxury Apartment Market in Vietnam

The reputation of the developer is very important too. Then facilities, finishes, equipment, level of features, technologies, how many units on each level, parking, views etc.

Quality levels of new luxury projects have steadily increased in Viet Nam; locations are good, quality of materials and finishing have both significantly improved while supporting project facilities have become world class. International interest in the luxury segment here is growing too.

To differentiate their luxury projects, developers are increasingly turning to world class architectural practices and interior design consultancies, an approach which has proved successful with buyers. Customer service has been taken to new levels, clients are fully supported throughout the sales stage, and this high-touch service continues when they move in, and after. The client has a beautiful property in one of the finest city locations – without complementing levels of service the property would be incomplete and its reputation lost. In the unlikely event any issue with the property comes up, service is prompt, and the problem is quickly solved. At this level there is no other sustainable approach to customer service and behind-the-scenes project management.

Opportunities: Demand and Absorption Speed

The luxury apartment market in Viet Nam only emerged recently but is already expanding. However, there are not many developments that align with the essential criteria to be graded “luxury”.

Luxury projects tend to have global branded Hospitality operators, such as Marriot etc. Some projects miss out being graded at the top of the market because of location or having too many units on each level - which has precluded some great projects in HCMC from being defined as ‘luxury’.

The core development focus remains on middle class buyers but robust economic growth over the past years has seen an emerging luxury segment buyer pool and increasing developer attention to the subsegment. There are more, and more very wealthy Vietnamese, in particular successful entrepreneurs. or high net worth individuals (HNWI) looking for places to invest.

The luxury segment appeals to local and international HNWIs, and local or international investment funds. When foreign property ownership was made legal in 2015, overseas interest was piqued and is growing; mostly from canny Asian investors snapping up products they consider bargains compared to prices across the region. Also, as larger MNCs establish head-offices in HCMC for major production facilities outside the city, more senior well remunerated expats will help drive luxury rental demand.

Upcoming challenges

New luxury products that align with high level demand are likely to be absorbed. But how quickly depends on market dynamics, potential and sentiment.

• A lot of key locations with green surrounding areas and views, are pretty much established. Re-building to a higher-standard is not a simple process.
• Sufficient parking is not always available, the maximum parking spaces in most premium developments are two per unit. HNWI people tend to have more than two cars and prefer them easily available.
• Land value in super premium locations. If the developer wants to aim for the luxury segment, premium land values sees high unit prices. Despite international views of value, local buyers, no matter how rich, are extremely savvy; especially regarding perceived value in Viet Nam.
• How Proptech develops in the next 5 – 10 years will further impact how technology is integrated within a unit, and project design. As we all become more tech aware, we want the latest technologies to align with our lifestyles. For HNWI’s this will need considerable attention to get right in their homes. If the approach is halfhearted and not intuitive, it may feel cheap and careless to more refined tastes.
• Also, evolving and changing buyer tastes means staying in touch with emerging local and global luxury trends. However, how luxury is defined in Asia is quite different to the Middle East, Europe, etc. An international buyer may want a property here with design themes the culture and pleasant weather enables. Design convergence to a global luxury standard would likely lose these unique influences, plus a ‘cookie-cutter approach’ may be off putting to potential buyers. Luxury design would be more a celebration of unique cultural themes, smart technologies for super-convenience; underlined by local and potentially business appeals, capital growth potential etc., which all together encourage purchase.

An Excellent Luxury Project Example

The level of luxury in new development The Marq is amongst the highest in market. Some design aspects actually go beyond what is offered in the most luxurious properties in Viet Nam.

Prime location: 29B, Nguyen Dinh Chieu, District 1, HCMC
High-light:

• By reputable international developer, Hongkong Land
• Private lifts for the 3- and 4-bedroom units

Although the project is not yet fully operational, the excellent reputation of the developer and standard of their luxury developments in Hong Kong and across Asia promises exceptional quality. One of the oldest major city streets in Sai Gon needs respectful development and the Marq delivers. As the name suggests, this project benchmarks luxury. We are confident of the highest build quality and facilities, smartly designed units with luxury finishing, smartly aligned to the HNWI market with customer service levels to match.

Find out more: The Marq-An exellent luxury apartment

Please contact Savills today to view the show suites:

• ☎️ International hotline: (+84) 0946 897 988
• 📩 Email: Sales@savills.com.vn