Why Invest In Luxury Apartments?

1. Market Context

Over the past decade, along with rapid urbanization, condominiums particularly luxury apartments have become one of the dominant real estate products in major cities such as Hanoi, Ho Chi Minh City, and Da Nang. This trend is even more pronounced as the real estate market is recovering and new legal frameworks will take effect from 2025.

Instead of focusing solely on land plots or townhouses as in the past, many individual investors as well as end-users have shifted their attention to luxury apartments, where they can find both long-term residential value and attractive investment potential. This trend has become stronger as foreign individuals are now permitted to own apartments in Vietnam, opening up a more transparent and appealing investment channel.

2. Advantages of Investing in Luxury Apartments

a. Prime locations with strong capital appreciation potential

Luxury projects are often located in central areas or master-planned districts, closely connected to transport infrastructure and urban amenities. This ensures sustainable long-term value growth for the property.

b. Superior amenities and elevated lifestyle quality

Unlike mid-range products, luxury apartments are equipped with comprehensive facilities such as shopping malls, swimming pools, restaurants, gyms, children’s play areas, and 24/7 security.

Such conveniences appeal strongly to high-net-worth clients and investors targeting the premium rental segment. In addition, with the legal framework allowing foreign ownership of apartments in Vietnam, luxury projects remain the top choice for international buyers who have higher demands for quality and comfort.

c. Rental yield and liquidity

In major cities, demand for high-end apartments from expatriates, business executives, and young affluent families remains consistently strong. This allows investors to secure stable rental income while also ensuring high liquidity when reselling.

From a legal perspective, lease and sublease agreements are now more clearly regulated under the Law on Housing 2023 and the Law on Real Estate Business 2023, providing stronger protection for both landlords and tenants, and minimizing potential disputes.

d. Professional management and operation

Luxury developments are usually operated by reputable international or professional property management firms. Stable service quality, transparent management, and timely maintenance help preserve the property’s long-term value and give investors greater confidence in rental performance and resale potential.

3. Key Risks in Luxury Apartment Investment

While luxury apartments offer clear advantages, no investment channel is completely risk-free. Buyers, whether purchasing for self-use, rental income, or resale should be aware of the following risks:

a. Intense competition

The growing number of luxury projects increases competition among developers and may reduce the competitiveness of older projects.

b. Financial risks

Luxury apartments are significantly more expensive than mid-range units, requiring investors to have strong financial capacity and higher risk tolerance. Most investors rely on bank financing. Market fluctuations or rising interest rates could result in repayment pressure and reduced investment efficiency.

c. High maintenance and service fees

Luxury apartments typically involve higher management and maintenance fees, which directly affect the investor’s net cash flow.

d. Legal restrictions on foreign ownership

Although foreigners are allowed to own apartments in Vietnam, ownership is capped at 30% of the units in a building. Furthermore, the standard ownership term is 50 years, subject to renewal. Foreign buyers must therefore be well-advised and plan their ownership strategy carefully to avoid long-term risks.

4. Legal Recommendations

Based on our advisory experience and practical market insights, Premier Realty recommends that clients interested in investing in luxury apartments take note of the following:

• Verify project legality: Ensure the project has complete legal documentation.
• Assess developer credibility: Choose projects by reputable developers with proven experience in luxury developments, ensuring quality and timely handover.
• Project location selection: Give priority to projects situated near central areas, with convenient transportation networks and surrounded by essential facilities such as schools, parks, supermarkets, and hospitals.
• Analyze market demand and liquidity analysis: Understand the target customer base and local demand before making investment decisions and enhance liquidity.
• Evaluate rental potential: For rental-focused investors, it is important to review market rental rates, sample lease contracts, and available property management services.
• Foreign ownership factors: Foreign clients should be clearly informed about ownership limits, duration, and renewal procedures upon expiry.
• Timing the investment: The high-end condominium market is sensitive to economic fluctuations. Choosing the right timing can help minimize risks and optimize returns.

Thorough project research, strategic location selection, and accurate market demand assessment are essential for reducing risks and maximizing investment efficiency. With the right strategy, luxury apartments are not only valuable residential assets but also a sustainable long-term investment channel.

Thank you!