The relaxed rules enabled foreigners to buy up to 30 per cent of the units in each new residential project, a quota which Kenny Law, of Savills Hong Kong, says was quickly filled by investors from Hong Kong, South Korea and mainland China. “Wealthy overseas Vietnamese represent another enthusiastic group of investors,” he said.

Such has been Chinese buyer enthusiasm that, from virtual obscurity in 2015, Vietnam now consistently ranks on Juwai IQI's 10 most popular countries list.

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Georg Chmiel, Juwai IQI executive chairman, says Chinese investors see in Vietnam's cities the next Shanghai or Beijing.

“With Vietnam's economic and demographic outlook, they fully expect prices to climb significantly in the years to come, while remaining safely decoupled from real estate price trends in China itself,” he said.

Chmiel added that in the past two years Chinese investors have shown an increasing preference for real estate in Asean markets; from their perspective, “Vietnam has it all”.

As Juwai IQI points out in a Vietnam market research report, condo prices there are tantalisingly affordable. It found that a high-end property in central Ho Chi Minh City costs US$3,000-6,000 per square metre while its equivalent in Bangkok costs around US$7,000-9,000 (HK$54,257-69,760), while in Hanoi and other coastal cities, “properties are even cheaper”, starting from US$109,800 for a semi-luxury home.

Yet in an ensuing construction boom, which saw mini cities arise across the country, not all developments were created equal. Stories emerged of “ghost” villas being sold but never completed, or projects built without the proper permits, or investment properties that failed to deliver the promised returns, especially in the burgeoning “condotel” sector, where units are individually owned but operate as a commercial hotel, which until February didn't even give owners the certainty of a title.

However, Nguyen Tran Nam, chairman of Vietnam Real Estate Association (VNREA), says the “few individual cases” of developers not fulfilling commitments to customers are the exception in a market that remains attractive to foreign investors.

“Developers violating commitments often have unsecured financial capacity, or lack practical experience in project management and development,” he said, adding that VNREA has proposed many solutions to the government and state management agencies which would remove legal barriers for investors to develop projects, and solve problems experienced by homebuyers.

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Matthew Powell, director of Savills Hanoi, agrees that the huge amount of supply coming into the market in the last five years has brought some issues, but believes that unprofessional developers have been thinned out by “natural filtration” – that is, by market demand.

“There's been much less of that in recent years,” he said. “Now consumers, both local and foreign, are very aware of the quality standards they are looking for. They're familiar with the developers, the architects, they know what the handover conditions are going to be, what fire safety needs to be, and so on.

“I think in the past, yes, there would have been fewer good developers but now it's actually quite a sophisticated market and the demand from buyers is also sophisticated. Vietnam today is by no means a backwater in terms of construction expectations.”

But as with any investment, it's a case of buyer beware, Powell added.

“Do your research. Make sure you are buying from a very reputable developer – especially in more remote locations – looking not just at the build quality but their financial capability and track record, whether they're based in just one city or they're international.”

Be cautious, too, of promises of unrealistically high rental “guarantees”, particularly with holiday properties, Powell advises. “If something sounds too good to be true, then it probably is,” he says.

Hang Dang, managing director, CBRE Vietnam, agrees that Vietnam offers a wide range of high-quality products from both local and foreign developers.

Examples include Empire City, Palm City and Riviera Point by Singapore developer Keppel Land, which sold 950 homes in Vietnam in 2019; CapitaLand's Feliz en Vista and d'Edge Thao Dien in Ho Chi Minh City; along with the upcoming launch of The River Thu Thiem, The Opera Residence, Sunshine Venicia in District 2 and Vinhomes Grand Park in District 9, all in Ho Chi Minh City; and Vinhomes Smart City, Vinhomes Ocean Park, Gamuda City and Ecopark in Hanoi.

“The checklist for buyers should take into account project location, developer brand/track records, legal documents, constructor and project management team,” she said.

“In recent years, property management has become increasingly important, especially following the Covid-19 outbreak,” Hang continued. “End users and investors now expect higher standards of property management, with CBRE anticipating increasing demand for better sanitation practices and attention to other hygiene-related issues. Together with high quality construction and timely handover, professional property management will be critical to shaping a developer's reputation and generating future sales.”

CBRE recently signed an agreement to become the property management agent for One Verandah, Singapore developer Mapletree's newly completed high-end flat project in Ho Chi Minh City.

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CapitaLand, one of the first international developers to enter Vietnam more than 25 years ago, expects long-term demand for residential developments by investors driven by Vietnam's economic growth and potential profit and positive rental yield. “Vietnam remains one of the fastest growing countries in Southeast Asia,” said Ronald Tay, chief executive officer, CapitaLand Vietnam.

“The International Monetary Fund has forecast Vietnam's gross domestic product to expand by 2.7 per cent in 2020, while the regional economies are expected to contract. With the Vietnam-EU Free Trade Agreement taking effect in August 2020, an increase in foreign investment is also expected over time. The inflow of capital and talent will generate further demand for quality residential projects.”

VNREA's Nguyen Tran Nam agrees that, in the post-Covid-19 era, Vietnam will remain very attractive to foreign investors due to its improved business-investment environment, the trend of shifting investment locations to Southeast Asia, and the complications of the US-China trade war.

“In particular, Vietnam has political stability, sustainable macroeconomic growth, and impressive and unique culture,” he said. “Ours is a country with a very open economy, currently ranked 105th in the world for the Index of Economic Freedom, up 23 places compared to 2019. Seventeen Free Trade Agreements are key to opening a global market for Vietnam.

“Along with efforts to implement the Vietnam Communist Party's strategy which considers tourism as a key economic sector, tourism real estate is gaining momentum, and there will be strong growth steps.”

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