Viet Nam's real estate market will become more competitive within the region because foreigner property rights will soon be allowed, Savills Viet Nam said in a statement on November 26.

The amended Housing Law that the National Assembly adopted on November 25 takes effect on July 1, 2015. It allows foreigners to lease and own a maximum of 30 per cent of an apartment building or a maximum of 250 villas or townhouses. This effectively provides a registered 50-year leasehold title.

Savills said the lengthily-discussed regulations had the full support of the country's property industry.

The amendment follows the relaxation on overseas Vietnamese, who now have full and unfettered ownership rights. In 2013, overseas remittances increased by 10 per cent year-on-year to US$11 billion, and much of this can now be invested effectively and confidently in real estate.

Foreigners now have an enforceable title that, at the same time, opens up a far deeper purchaser pool. This will add greater liquidity to a residential property market that is now showing signs of modest recovery across the nation.

It will also allow investors with entry visas to have exposure to a very attractive asset class within an emerging market that has excellent structural characteristics and strong growth potential.

Foreigners are also allowed to pay for the property via a financial organisation operating in Viet Nam. The banking sector is highly competitive, and this should promote easier access to property mortgages for foreigners.

"These amendments follow wholesale legal reform influencing many sectors, and comes at a time when foreign investors are showing increasing interest. Viet Nam's rapidly changing legal landscape is creating greater business certainty and a healthier and more competitive financial enviroment," the statement said.

HCM City Real Estate Association Chairman Le Hoang Chau told VnExpress online that a country that enabled foreigner property rights could be considered as "exporting on the spot," which would help increase demand in the property market and national asset values.

Foreign organisations entitled by the amended law to own houses in Viet Nam include entities investing in housing projects and foreign invested enterprises, as well as their branches or representative offices here. They also comprise foreign investment funds and foreign bank branches operating in the country.

Foreign individuals and institutions may inherit apartments and houses in commercial projects which are not located in areas restricted by the Government. Individuals may extend their home ownership or lease their property in specific cases.

Foreign homeowners are subject to Viet Nam's property taxes.

VNS/VNN