Real estate market changing in Laos
More Lao entrepreneurs are building apartments and rental houses to meet the rising demand of foreigners living in Laos, according to an expert in the field.
Managing Director of RentsBuy Co., Ltd. Houmphan Sayalath told Vientiane Times on Wednesday that about 80 percent of those operating real estate agencies are Lao and the rest are foreign investors.
Chinese and Korean businesspeople have also begun investing in allocated houses and apartments for rent after witnessing rising demand in the real estate market.
The inflow of foreign investment to Laos has resulted in more people seeking to rent houses and apartments, particularly foreigners who cannot own land in their own right.
“After the establishment of the Community three months ago, more entrepreneurs from Asean nations have come to Laos to do businesses and rented houses and apartments here, driving demand for rental businesses in the country,” Mr Houmphan said.
He said the highest demand for rental houses and apartments is for those in the price range from US$500-1,000 a month because most people prefer to rent at these prices.
Mr Houmphan said there is still some demand for apartments or rental houses for prices between US$1,000-1500, especially from diplomatic staff and the managerial level of development projects and companies.
Although UN agencies have reduced their staff in Laos, the demand for rental properties is still increasing due to the inflow of foreign nationals.
Over the past decade, Laos has also seen a significant amount of hydropower development and is serving the energy needs of its neighbours as well as becoming an important mining destination and logistical hub for regional trade.
Many companies involved in these sectors, especially from Vietnam, China and Thailand, have now located their head offices in Vientiane. Foreign banks have also sprung up in the capital to serve the needs of these investors.
Laos has seen a rising number of entrepreneurs from the Republic of Korea, Japan and other Asean nations which is driving the growth of the real estate sector.
Mr Houmphan said there are 131 apartment buildings in central Vientiane but as many as 150 are under construction.
Most people in the business are now building apartments instead of houses as rental properties.
Some tenants prefer a longer term lease if they are comfortable with the house and surroundings but most accept the greater flexibility of a shorter lease, those in the industry say.
Vientiane's Chanthabouly district is the location of many offices and can be considered as a main business district so many prefer this location, which is also close to the main entertainment areas.
There is also some demand for house rentals in Luang Prabang province for those working in the hospitality industry and in Savannakhet and Pakxe district, Champassak province, where many industries are located.