Four million foreigners, overseas Vietnamese wish to own properties in Vietnam: ministry

An estimated 4 million foreigners and overseas Vietnamese have a desire to purchase houses in Vietnam, according to the Ministry of Construction.

Since the 2014 Housing Law took effect on July 1, 2015, 3,053 foreigners have bought homes in Vietnam, mostly apartments, the ministry said in a report.

These properties are mainly in big cities and provinces such as Hanoi (1,765 units), Ho Chi Minh City (850), Bac Ninh (110), Binh Duong (210), and Ba Ria-Vung Tau (50). The majority of foreign home buyers came from South Korea, China, Singapore, the U.S., Australia, Japan and Malaysia.

However, the total number of foreign buyers in Vietnam is still modest compared to the demand. According to the Vietnam Association of Realtors (VARS), the number of homes purchased by foreigners in Vietnam since the 2014 Housing Law took effect accounted for only 0.53% of the total number of houses in the country during the 2018-2022 period.

Meanwhile, foreigners living and working in Vietnam have a high demand for properties to live in or conduct business in the country, it said.

"The trend of increasing house purchases by foreigners in Vietnam is a good sign, reflecting that our country is a fast-growing and dynamic economy, rated as a bright spot in the Asian region by prestigious international organizations,” said VARS.

In recent years, a series of "eagles" with large capital flows have been looking at development opportunities in Vietnam, the association noted.

Along with the strong flow of FDI capital, the number of foreigners coming to live and work permanently in Vietnam increases every year. According to the General Statistics Office, the number of foreign workers in Vietnam skyrocketed from 12,000 in 2005 to 100,000 as of March 2022.

“Long-term working in Vietnam as well as demand for investment in Vietnam’s potential real estate market will certainly lead to a need to own houses and apartments in the country,” said the association.

High housing prices and tightened immigration regulations in some countries will also make the demand for home ownership in Vietnam increase, it added.

More specific regulations rather than more barriers

The sale of houses to foreigners has become a hot topic since the National Assembly, the highest legislative body of Vietnam, discussed the draft amended Housing Law. This policy will not only create conditions for foreigners to feel secure in living and working in Vietnam, but also helps attract foreign investment and clear a large inventory of high-end real estate.

“The view is positive and consistent with international trends,” VARS said, noting the number of foreigners buying houses reflects the market outlook and is also an indicator of the economy’s dynamism, openness and potential.

This policy was stipulated in the National Assembly’s Resolution 19/2008, but only since specific conditions were added to the 2014 Housing Law has the number of foreign individuals and organizations owning houses in Vietnam increased.

Since the 2014 Housing Law took effect on July 1, 2015, foreigners with legal entry have been able to buy and own apartments or detached houses in commercial projects for a maximum period of 50 years, which could be extended if needed, except in defense and security protection areas. But under the Land Law, foreigners cannot own the land on which the homes stand, which is why most foreigners have opted for apartments. They cannot own more than 30% of the total number of apartments in an apartment building or more than 250 individual houses in a residential area that is equivalent to a ward-level administrative unit.

There are many barriers, especially legal and administrative procedures, making it difficult for foreigners to access housing in Vietnam. Therefore, in order to create favorable conditions for attracting investment and “retaining" a large number of highly qualified foreign personnel, the Housing Law needs to be revised in line with regulations and realities. “There should be uniform and more specific regulations instead of increased barriers,” said the association.

It is necessary to continue to increase the housing supply and develop products suitable for the housing and investment needs of foreigners in Vietnam in permitted areas. To avoid speculation, VARS proposed imposing a progressive tax on real estate. The tax rate can be gradually increased if the owner does not use the property.

Foreigners should be permitted to buy houses from Vietnamese citizens and tourism real estate as these are high-end, difficult-to-sell products, and suitable for foreigners' pockets. This policy, once effective, will help clear a large amount of inventory, making the market more vibrant, it added.

Under the latest draft amended Housing Law, expected to be approved by the legislature this November, foreign organizations and individuals will not be allowed to own houses attached to land as is currently the case.

Data from the Overseas Vietnamese Entrepreneurs Association indicated that there are about 5.5 million Vietnamese living abroad and more than 1 million second- and third-generation Vietnamese of foreign nationalities with parents or grandparents originating from Vietnam. Of whom, about 600,000-700,000 people are businessmen and highly qualified intellectuals. Many want to return to their homeland to invest, do business, or live, so the demand for housing in Vietnam is huge.