U.S. immigrants buying homes back in Vietnam
SAN JOSE - When Michael Tran and his wife decided to invest in real estate,
they wanted something close to home. So the Newark, Calif., couple
purchased a plot for a three-bedroom home - in Vietnam.
The Trans, immigrants from Vietnam, are among the first to take
advantage of a relatively new Vietnamese law that allows some
Vietnamese expatriates to legally own property in the communist country
for the first time. California companies are teaming up with Vietnamese
construction firms, some partially owned by the Vietnamese government,
to attract Vietnamese-American buyers - and appeal to the immigrants'
American sensibilities.
This twist on the American dream of homeownership is not without
controversy. Many would-be buyers are wary of reaction from parts of the
Vietnamese-American community that disavow any dealings with the
communist regime.
For Tran, the decision to buy was personal. At 34, he and his wife are
already planning their retirement, which they hope to spend in Vietnam.
"It's been my dream to be able to buy a home in my country and retire
there," Tran said.
Many buyers like Tran are purchasing the homes as investments. Some
older Vietnamese plan to use the houses for extended visits, and some
business people who travel frequently to Vietnam see homes as more
comfortable than hotels.
John Thi Nguyen, a high-tech worker in Silicon Valley, turned to
Vietnamese real estate because of the terrorism threats and turbulent
economy here.
"Especially after 9-11, Vietnam is now considered to be one of the safest
places in the world," said Nguyen, who already owns a home in Morgan Hill,
Calif. "It's a better investment than anything here in the United States."
The deciding factor for many is that they'll legally "own" their Vietnamese
properties. (Because Vietnam is a communist country, no one technically
owns the land their home sits on. Instead, the government issues a
land-use permit and individuals can own the actual house or structure.)
Though many Viet kieu, or overseas Vietnamese, have invested and owned
real estate in Vietnam for a long time, it wasn't until late 2001 that the
government passed a new law allowing Viet kieu who meet certain criteria
to legally own property. Before the new law took effect, expatriates who
bought property in Vietnam had relatives in the country hold title to the
properties.
The law, which is only now gaining wide public notice, comes on the heels
of a real estate boom in Ho Chi Minh City and Hanoi, where some land
values have tripled and quadrupled in the past five years. Much of the real
estate spree is occurring just south of overcrowded Ho Chi Minh City, home
to 7 million people, with thousands of Americanized homes under
construction.
Ironically, the name of the new city being developed - Saigon South -
harkens back to the pre-communist era, when Ho Chi Minh City was known
as Saigon.
The area attracts a small but growing Vietnamese upper class, Viet
expatriates and foreigners. In a country where the per capita income is
$438, the luxury apartments and homes in Saigon South run from $65,000
to $850,000 - with most buyers paying up front in cash or gold. By
comparison, a typical upscale home in the city might run $100,000.
Tran's home costs $113,000 - more than twice as much as an upscale
home in Ho Chi Minh City. And it's being built specifically to suit
Americanized tastes. Tran and his wife chose the "San Francisco" model,
featuring walls of windows and modern architecture. It will also have a
very un-Vietnamese feature in this country where motorbikes are the
dominant form of transportation: a garage.
The developer, Intresco, is part of a major construction conglomerate in
Vietnam and is developing 252 homes in a gated community dubbed the
"Viet Kieu Village" in Saigon South. It's also building homes elsewhere in
the main city for expatriates.
The company's sales and marketing partner in the United States is Milpitas,
Calif.-based Donnelley LT Group. The two firms last year hosted a focus
group of Vietnamese-American real estate agents to help them understand
what home buyers here want.
"Vietnamese in Vietnam and overseas Vietnamese have completely
different tastes," said Paul Hoang, Donnelley's managing partner. "Viet kieu
who have been in the United States for a very long time are used to a
more American style."
Besides the "San Francisco" style, Intresco offers the "Santa Barbara," a
one-story ranch-style home, and the "San Luis Obispo," a two-story ranch
with dormer windows, which isn't a feature in Vietnamse architecture.
The Vietnamese builders are perplexed by some of the demands of
Vietnamese-American buyers: front and back yards and gardens, lots of
picture windows and homes that don't sit right at the street line.
"Most Vietnamese value a home that's right at the street, the closer the
better!" said Ngo Tung Chinh, general director of Intresco in Ho Chi Minh
City.
That's because many Vietnamese homes, which are often narrow and are
three or more stories, often house a business on the bottom floor: a small
restaurant, a sundry shop or, more likely these days, an Internet cafe.
City homes also don't usually have gardens and yards because space is
such a premium. And while Westerners like large windows that bring in
sunlight, some Vietnamese think too much glass is hazardous because it
could break.
Besides the Western-style designs, Vietnamese-American buyers are also
lured by marketers' promises to help them avoid the Vietnamese
government's bureaucracy.
Tymes International, based in Southern California, charges a 5 percent fee
to handle all the paperwork on the Vietnamese end. The firm is selling
homes for Saigon South-based Phu My Hung Corp., which is developing
thousands of properties for rich Vietnamese and expatriates. The fee also
includes a round-trip ticket so buyers can view their homes and sign the
necessary paperwork.
Overall, "It's a good deal. You can't even buy a condo for $100,000 in
California," said Khoa Nguyen, a San Diego acupuncturist, who travels
annually to Vietnam to do philanthropic work. "And it looks just like my
home in San Diego."
There are a few wrinkles. Some would-be buyers may be staying away for
fear of disapproval by a very visible part of the Vietnamese-American
community that rejects any relationship with the Vietnamese government,
said Hoang of Donnelley. Many homebuyers refuse to talk publicly about
their purchases because they fear retaliation.
The Vietnamese government itself is limiting who can own property. The
new law only allows expatriate Vietnamese who meet one of four criteria to
own property: if they have business investments in Vietnam, have made
"significant contributions" to Vietnam, plan to resettle permanently in
Vietnam or if they are cultural activists, scientists and economists who
have been invited by the Vietnamese government to Vietnam. Many, but
not most, potential Viet kieu buyers qualify under those definitions.
Since Tymes International began advertising its home sales program a few
months ago in Vietnamese-American newspapers in the Bay Area and
Southern California, it has sold 44 homes - but could have easily sold 100
had the law been applicable to all overseas Vietnamese, said President
Christopher Tran. Tran and others in the industry think the law will be
amended soon to be more inclusive.
"You have to be patient when you're dealing with the Vietnamese
government," said Tran, who's been doing business in Vietnam since 1993,
a year before the United States lifted its trade embargo with the country.
"Things happen slowly. They like to do things on a small scale first, but
eventually they open it up."
By K. Oanh Ha - San Jose Mercury New - February 21, 2003.
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