Search Vietnam Import Export Companies Enter your search terms Submit search form Did You Know? Foreigners (Vietnamese included) can buy real estate in the U.S. July 28, 2008 Many of us are familiar with a saying that "one's misfortune is another's opportunity". And it is hard to cite a better example than the current situation of the real estate market in the U.S. We often hear from real estate agents that the three most important factors that determine a property value are "location, location, and location". Another word, all real estate is about locality, except for one thing - this time around not all real estate buyers are local. Nowadays international buyers have become a significant part in U.S. the real estate equation. Both home sales volumes and prices have sunk deeply, and lots of foreigners now have opportunities to invest in U.S. properties. Southern California, one of the favorite locations for international buyers, home prices have dropped nearly 30% between June 2007 and June 2008. California, Florida, and Texas are among preferred locations for international buyers and accounted for about half of foreign investments in real properties. Let's take a look at contributing factors that entice foreign buyers. 2008 U.S. median home prices have downed significantly as compared with that of 2005. The median home sales price in California was $355,000 in June 8008, down 29.3% from that of 2007. And home prices are now about what they were 4 years ago. According to DataQuick Information Systems, in the second quarter of 2008 (April-June), default notices have been sent out to 118,020 homes, an increase of 125% as compared to the same period of last year, and is the highest number since 1992. In the same period, the percentage of foreclosed sales with respect to total sales volume of existing homes in California varies from county to county, with San Francisco County is lowest at 3%, and Merced County highest at 75%. And the overall figure for California is about 40%, an increase of 5.4% from a year ago. Some key data of international buyer activities in the past 2 years: International customers by region and leading countries Sorting by region, that more than 30% of foreign buyers was from Europe while 25% from Asia and about 15% from Latin America. By country, Mexico accounted for (13%), the United Kingdom (12%) and Canada (11%). Type of properties International buyers preferred single-family homes or townhomes. Nearly half of foreign buyers are interested in buying property as a vacation home, and about 30% purchase as both vacation and investment or for business purpose. Price range of investments According to the NAR (National Association of Realtors), most international buyers purchased single-family homes or townhomes. In 2006, the median sales price of homes purchased by international buyers was $299,500, which is higher than the U.S. median of $221,900 during the same period. Type of financial arrangements About 30% of buyers was paying cash and 70% using mortgage financing. For mortgage financing, depending on where the international buyers live, the required down payment percentage could vary. For European nations that have a U.S. equivalent credit report system, the down payment may be less than that of other regions without similar credit system. In general, however, foreign customers usually need to prepare for a larger down payment percentage than that of U.S. residents. Foreign owners do not automatically become U.S. residents Foreign owners can come to visit or stay temporarily at their property in the U.S. You can go to the U.S. as a tourist or on a business visa. Note that buying a property in the U.S. by no way link to U.S. residency. The investment in real estate does not automatically qualify you to become a U.S. resident. Establishing permanent resident is a different and separate immigration issue and you should consul an attorney or a subject matter expert. Do foreigners have to pay property tax, rental income, and capital gain when selling? Yes. The county where the property is located usually collects property tax. For more details about rental income and capital gain, go to federal taxes. Notes: The information provided herein is for informational purposes only and should not be relied upon without consulting a competent attorney. VietnamAccess.com does not function as legal counsel nor provides legal advice, and is not responsible for loss or damage whatsoever. Industry Update - Vietnam Auto Sales Down For the first time in the last year, automobile sales saw a sharp decrease of nearly 2,000 unit in May over the previous month. (Source: TBKTVN-VNN) June 9, 2008 The total sales of 16 members of the Vietnam Automobile Manufacturers' Association (VAMA) were 11,494 units in May, down by 1,777 units compared to the previous month. This was the first time the sales of cars decreased in the last one year. However, the signs of the downturn began last month when sales increased by 180 units only in April compared to March. According to VAMA, Vinamotor saw the most dramatic decrease in sales as its sold units were 1,932, a decrease of 1,588 units over the previous month. The sharp decrease has dropped Vinamotor to the second position in sales, giving up the first position to Toyota Motor Vietnam. In May 2008, Toyota sold 2,332 units, up by 67 units over the previous month, the smallest increase the manufacturer has seen in its operation history in Vietnam. Despite the slight decrease over the previous month, GM-Daewoo and Honda still maintained high sales with 1,355 and 626 units sold, respectively. The Spark model was launched onto the market in late May, which means that GM-Daewoo only began accepting orders at that time, and the manufacturer will be able to deliver the first Sparks in late June or early July. Ford Vietnam witnessed a sharp decrease in sales in May compared to April. Only 482 units were sold in May, down by 227 units over the previous month. The sharp decrease has been attributed to the slide in sales of Ford's popular Everest 4x2, which saw the decrease of 177 units over April with only 139 units sold. Meanwhile, other manufacturers, including Mercedes Benz, Mekong and Vinastar, had sales volumes rising slightly in May over the previous month. The sales decreases of the 16 VAMA members have been attributed to the recent increases of the import tax on complete built units (CBU) and tax on car part imports. Meanwhile, the tentative plan by the Ministry of Finance to raise vehicle registration fees to 10-15%, up by 5-13%, together with its plan to raise the luxury tax, has also been keeping customers away. Vietnam Real Estate Market Update January 24, 2008 In Nha Be District, a rural area of Ho Chi Minh City, land prices have gone through the roof as of January of 2008. For a piece of land of 1,000 square meters which was worth some $US 30,000 in early 2006, may now worth 10 times as much. The real estate and infrastructure developments in recent years in South Saigon might have pushed land pricing in the vicinities. The increases in land prices have been noticed in these districts: 2, 7, Nha Be and Binh Chanh. Investor speculations, population growth and an influx of foreign investments have been recognized as key factors contributing to the increase in Vietnam real estate. Other causes that propel property prices include demand-supply issue, government regulations, the opening of Thu Thiem Bridge in early 2008, and the down turn in Vietnam stock market. The VNINDEX (Ho Chi Minh Stock Index) has dropped some 30% since March 2007. Experts predicts that both residential and office rentals are to rise considerably in 2008. Vietnam major cities, Ho Chi Minh City (Saigon), and Ha Noi, are now among the most expensive real estate markets in the world. Vietnam economy is among the most robust economies in the world with estimated GDP growth rate of above 8% in 2007 and this rate is expected to continue in 2008. 2007 Update - Vietnam Advertising Industry After two decades of development, since Vietnam's doi-moi policy was implemented in 1986, Vietnam's advertising companies are still far from gaining a significant share of industry revenue estimated about $US 1 billion. Among the main reasons are shortage of skilled work force, experience, financial capability, and management. According to industry experts, Vietnam has not formulated a clear long-term strategy to compete with foreign advertising companies. Despite the attractive salary offers, between $US 500-1,000 per month, domestic companies are having problems recruiting competent workers since universities and colleges have not produced up-to-date and capable advertising graduates. There are more than 1,000 domestic advertising companies that hold about 15% of market share, while the other 30 major foreign advertising firms hold some 80% of Vietnam advertising market. Many multi-national corporations such as Coca-Cola and Unilever are using highly regarded international advertising companies. Among the successful firms are: US-based J. Water Thompson and Ogilvy & Mather. Figures released by the government sated that some 80 percent of revenue was in television and newspaper advertisements, and about 10 percent from billboards. Vietnam has some 60 broadcast stations, and more than 600 newspapers in Vietnam. Among the most popular stations are: Viet Nam Television (VTV) and Ho Chi Minh City Television (HTV). According to Vietnam's Ministry of Culture and Information, under WTO commitments, foreign-invested advertising firms will be permitted to establish branches in Vietnam by the end of this year. From 2009, foreign firms will be allowed to form wholly foreign-invested entities, and the existing limit of 49 percent of chartered capital they are permitted to contribute to ventures will be removed. More on Vietnam Advertising.

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