REAL ESTATE NEEDS MORE FOREIGN INVESTMENT: EXPERTS
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| The number of foreigners buying real estate products in Vietnam has increased, but the domestic property market needs policies to attract more foreign investment. |
The number of foreigners
buying real estate products in Vietnam 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 Vietnam 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
Vietnam. Therefore, it proposed to add conditions for foreigners to buy houses
in Vietnam. 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 Vietnam due to many reasons, including financial
ability of foreigners, their jobs in Vietnam, 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 Vietnam for foreign individuals and organizations 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
organizations and individuals can own in buildings and housing projects are in
accordance with the actual conditions of Vietnam and international regulations.
Nguyen Khanh Duy, Savills Vietnam’s HCM City residential sales
director, said a limit on the number of apartments owned by foreigners was very
important to minimize and prevent negative impact on domestic socio-economic
development.
Vietnam‘s Circular 19/2016/TT-BXD and Decree 99/2015/NĐ-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 Vietnam has
82,000 foreigners working and living here and more than four million overseas
Vietnamese, who have high demand for buying housing products in Vietnam
According to Savills Vietnam, the 2015 amendment of the Law on
Housing allowing foreigners to buy houses in Vietnam 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 favorable 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, Hanoi
and Da Nang, according to Savills Vietnam. However, there are a small number of
red books or land use rights certificates that were licensed to foreign organizations
and individuals buying houses in Vietnam. The number is lower in comparison
with the high demand from foreign buyers because foreigners are not yet clear
about legal procedures in Vietnam, 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.
“Source: vietnamnews.vn”
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