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Amendments to the Law on Housing in 2015 that allow foreigners to buy homes in Vietnam is considered a positive change. In general, requirements have been regulated quite clearly and specifically, creating a new source of demand and promising to further promote the development of the local real estate market.
Legal procedures for foreigners to purchase real estate have received positive feedback from both vendors and buyers after nearly three years of implementation.
Savills said that only Ho Chi Minh City’s real estate market, however, has seen thousands of successful transactions with foreign customers over the last two years and many projects have reached the ceiling on foreign ownership this year shortly after sales opened.
“One project located in the prime location of District 2 opened for sale in the second stage, and the quota for foreigners of 30 per cent was quickly reached,” said Mr. Duy. “Foreign customers are mainly from Asia, such as South Korea, China, Taiwan, Hong Kong, and Singapore.”
According to Savills Vietnam, projects located in strategic locations such as District 1 and District 2, especially Thao Dien and Thu Thiem, and which have reputable investors are now receiving much interest from overseas customers and have very high absorption rates. Products attracting international buyers are mainly in the high-end segment and meet requirements regarding project quality, relevant services in consultation and sales, as well as leasing ability.
Mr. Duy added that the regulations that limit the number of apartments purchased by foreigners aim to minimize and prevent any negative impact on the economy and society. However, some 82,000 foreigners are currently living and working in Vietnam and there are more than 4 million overseas Vietnamese. Therefore, adjusting the limits to make them suitable for some types of real estate in certain areas with special needs, such as condominiums or Grade A apartments, is another direction that needs to be considered.
Many foreign customers have expressed an interest in the real estate market of major cities, especially Ho Chi Minh City, Hanoi, and Da Nang, but the number of red books issued to foreign organizations and individuals buying houses in Vietnam is low compared to customer interest and demand.
“Foreigners not knowing the legal procedures in Vietnam and some local administrations not being familiar with foreigners has been noted as a barrier,” Mr. Duy said.
The government recently met and discussed the draft Law on Special Administrative-Economic Units (special zones). The leasehold for home ownership for foreigners in Vietnam would be extended from 50 years to 99 years if the draft law was to be approved.