The number of foreigners buying real estate products in Viet Nam has increased, but the domestic property market needs policies to attract more foreign investment, according to experts.

Nguyen Trong Ninh, director of the Housing and Real Estate Market Management Department under the Ministry of Construction, said a policy on licensing foreigners buying and owning houses in Viet Nam was issued in 2008.

In 2014, the Ministry of Construction reviewed and evaluated this policy during its study of the amendment of the Law on Housing. According to the ministry, from 2008 to 2014, some 126 foreigners owned property products in Viet Nam. Therefore, it proposed to add conditions for foreigners to buy houses in Viet Nam. The amended Law on Housing 2014 including those proposals was passed in 2014 and came into effect in 2015, Ninh said.

Following two years of implementing the amended Law on Housing, the domestic property market has developed in the positive direction in the segment of selling real estate products to foreign buyers, and foreigners have supported the proposals, according to reports from localities sent to the construction ministry.

From 2015 until now, some 750 foreigners received housing ownership certificates, six times higher than the period from 2008 to 2014.

However, there are not many transactions involving foreigners buying property products in Viet Nam due to many reasons, including financial ability of foreigners, their jobs in Viet Nam, demand, location and price of houses, according to Ninh.

As a state management agency in the field of housing, the Ministry of Construction said in the current period, regulations on housing and policies related to housing in Viet Nam for foreign individuals and organisations had been open, including subject, conditions on ownership and the number of houses that can be owned by foreign buyers.

Meanwhile, regulations on the number of houses that foreign organisations and individuals can own in buildings and housing projects are in accordance with the actual conditions of Viet Nam and international regulations.

Nguyen Khanh Duy, Savills Viet Nam’s HCM City residential sales director, said a limit on the number of apartments owned by foreigners was very important to minimise and prevent negative impact on domestic socio-economic development.

Viet Nam’s Circular 19/2016/TT-BXD and Decree 99/2015/ND-CP regulate the number of houses owned by foreigners to tighten procedures on re-sale of real estate products and increase transparency in the process of implementing administrative procedures for these property products.

However, Duy said an adjustment that will create suitable quotas for certain kinds of property products, such as resorts or Grade A apartments, should also be considered carefully. The state should have flexible quotas to create a positive dynamic for the local property market because Viet Nam has 82,000 foreigners working and living here and more than four million overseas Vietnamese, who have high demand for buying housing products in Viet Nam

According to Savills Viet Nam, the 2015 amendment of the Law on Housing allowing foreigners to buy houses in Viet Nam was considered a positive change in policy. That action has promoted further development of the local real estate market.

It was expected to create more favourable conditions in stimulating development of investment, tourism and service in the real estate sector.

In fact, property projects and products attracting foreigners have been mainly in the high-end segment.

Markets attracting foreign buyers include HCM City, Ha Noi and Da Nang, according to Savills Viet Nam. However, there are a small number of red books or land use rights certificates that were licensed to foreign organisations and individuals buying houses in Viet Nam. The number is lower in comparison with the high demand from foreign buyers because foreigners are not yet clear about legal procedures in Viet Nam, while state administrative offices in some localities are not familiar with regulation related to foreigners.

For large investors, to find suitable property projects, they often choose to work with an international consulting firm that has a network of offices and branches in many countries to ensure that all questions related to legal and trading procedures will be explained satisfactorily. Sometimes, they do not need to pay more money for consulting services.

The big investors will choose a company with experience, reputation and ability to communicate well in many languages to save time and money.

However, in terms of customers, these investors should have specific requirements on the project to get the most detailed consultation information, Duy said. 

VNS