Private property is popular in Vietnam

Land fever is gripping communist Vietnam, one of the strongest signs yet that capitalist-style policies introduced piecemeal during the past 15 years are here to stay. Eager for a piece of the action, the Vietnamese are pulling their savings out of mattresses and ploughing them into the safest investment they know: private property.

In a two-year frenzy, Vietnamese in Hanoi and Ho Chi Minh City have driven prices up to – and, in some cases, beyond – those paid in London, New York and Tokyo.

A square metre of prime residential property is currently selling for as much as US$8,700 in Ho Chi Minh City and almost $24,000 in Hanoi – compared with $15,000 in London and nearly $11,000 in Tokyo.

In Hanoi, a Vietnamese buyer recently plunked down the equivalent of $179,000 – almost $24,000 per square metre – for a 7.5-square-meter narrow shop front on Hang Dao street.

Few buyers seem deterred by the fact that Vietnam is run by a Communist Party with a history of hostility toward land ownership. Also, people pile into property largely because they lack investment alternatives, say economists.

Source: Barry Wain, In Vietnam, a New Passion for Property, Wall Street Journal, April 23, 2003.

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FMF Policy Bulletin, 29 April 2003