Billionaires eye Vietnamese real estate

Vietnamese real estate has drawn attention from wealthy investors here, amid rising interest in overseas realty investments among Korean billionaires, the Korea Wealth Report 2019 published by KB Financial Group Research Institute showed Sunday.

According to the think tank’s survey of 400 rich people owning financial assets worth over 1 billion won ($831,000), more than half of them responded they are interested in overseas real estate investments.

In particular, 59 percent among those having total assets worth less than 5 billion won — who accounted for 60 percent of the 400 respondents — said they have interest in such an investment strategy. As for those with total assets worth over 5 billion won, 53.9 percent of them answered they are interested in investing in buildings and land abroad.

The multiple-answer survey showed Vietnam is the most preferred country for real estate investments.

Among those who responded they are interested in overseas real estate investments, 57.1 percent said they prefer the Southeast Asian country.

Singapore, China and Malaysia followed Vietnam, winning the hearts of 32.1 percent, 30.7 percent and 26.4 percent of Korean billionaires, respectively.

Wealthy Koreans having total assets worth over 5 billion won showed interest in Europe and the United States as well. The think tank attributed their preference for the developed regions to concerns for portfolio diversification of the superrich who can afford investments in relatively higher-priced assets.

According to the survey, rich Koreans preferred indirect investments in overseas real estates to direct ones.

The research institute said rich people’s avoidance of understanding and analyzing the unfamiliar foreign markets led to the tendency of their preference for indirect investments through funds or real estate investment trusts (REITs).

Meanwhile, the institute’s report also showed wealthy people in Korea will remain cautious about expanding their investments in 2019.

“The wealthy are delaying their investments, due to the economic slowdown following the U.S.-China trade war and regulations on the domestic housing market,” the institute said in the report.

In addition, the number of individuals having financial assets worth 1 billion won were 323,000 as of the end of 2018, up 4.4 percent from 310,000 a year earlier.

According to the report, this was the lowest growth rate over the past five years.

The think tank said a huge plunge in the benchmark KOSPI index in late 2018 caused the slowdown in the growth of the number of rich people in Korea.