Update: 14:06:17 28-06-2018Date Submitted : 13:39:00 25-06-2018
"After nearly 3 years of implementation, the law on foreigners buying real estate here has received positive feedback from sellers and buyers." - According to Mr. Nguyen Khanh Duy - Residential Sales Director, Savills HCMC.
Amendments to the 2015 Housing Law allowing foreigners to buy property in Vietnam have been positively received. Generally, requirements have become clearly defined and this evolution of the local real estate market has created a new source of demand.
Foreigners buying houses here will help stimulate investment, tourism and services development. This approach aligns with international practice, benefits the economy and increases Vietnam property appeal and its potential buyer pool.
After nearly 3 years of implementation, the law on foreigners buying real estate here has received positive feedback from sellers and buyers. According to Savills Vietnam, the HCMC real estate market has seen thousands of successful transactions with foreign clients over the last 2 years. In 2017, many projects reached the 30% foreign ownership limit [of total units] in a very short time. For example, the second phase of a project in a prime district 2 location opened for sale. The 30% quota was taken up almost immediately with many foreigners turned away. Clients were mainly Asian from countries such as Korea, China, Taiwan, Hong Kong, and Singapore. The overall assessment so far is district 1 and two projects by reputable developers in strategic locations such as Thao Dien and Thu Thiem areas are getting attention and good consumption rates from foreigners. Projects and products attracting overseas buyers are mainly in the high-end segment that meet quality and consulting services requirements. A great deal of buyer appeal is the potential in buy-to-let.
Advantages and Difficulties
Limiting the number of apartments purchased by foreigners is important as it minimizes negative impacts to the economy and society. According to Circular 19/2017/TT-BXD and Decree No. 99/2015/ND-CP issued by the Ministry of Construction, regulating numbers of houses/apartments owned by foreigners was to tighten resale procedures, and increase transparency in legal and administrative processes. However, adjusting limits to make them more suitable for property in areas with special demands, such as condominiums or Grade A apartments, is another direction that needs consideration. The flexibility of limited-area coverage over fixed limits would support the market, especially with over 82.000 foreigners living and working in Vietnam (According to data released by the Ministry of Labour, Invalids and Social Affairs by May 5, 2016) and the over 4 million Vietnam diaspora.
After several years of the revised Housing Law being in place, many foreigners have expressed interest in Ho Chi Minh city, Ha Noi, and Da Nang real estate. The number of pink books issued to foreign organizations and individuals buying houses has been relatively low considering interest and demand. The key identified barriers are foreigners not knowing local laws and legal procedures and many local administrations not being familiar with foreigners.
To find real estate that suits them, foreign clients should ideally use an international consulting firm to clarify legal and purchasing procedures. In market leading agencies ability across multiple languages helps saves time, money, and frustration. Investors should always identify their own budgets and specific requirements against projects they have interest in too. The agency can then quickly and accurately support to smooth the more complex areas and help realize buyer aims.
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