A new proposal to permit foreigners and foreign organisations to own property in Vietnam is being hailed by investors as a landmark move.Richard Leech, director of the CB Richard Ellis, said the proposal, drawn up by the Ministry of Construction, was a good move for the country.
“It will help Vietnam attract even wider investment. A lot of people who are working and living here want to own a home,” Leech said. However, Leech stressed that although foreigners were keen to own property in Vietnam, demand would be dictated by how attractive the regulation is.
According to the proposal, people eligible to buy property will be foreigners who are directly investing in Vietnam, those making big contributions to the country recognised by the government, scientists, experts, individuals with specialist labour skills and those who marry Vietnamese nationals. Eligible people must then meet at least three conditions. They must be living and working in Vietnam, they must be allowed to stay for at least one year and they must buy the property for their own, or their family’s use.
Economic organisations will also be permitted to buy accommodation for their expat employees.
If approved, this regulation will be piloted in Hanoi and Ho Chi Minh City.
Lee Jong Sun, representative of Pumyang Construction which is developing a property project in Ho Chi Minh City, applauded the initiative.
“I am a foreigner who has been living in Vietnam for more than 10 years. I would like to buy a house or an apartment as it will make living and working here much easier,” he said.
Sun said a reasonable selling price for foreigners wanting high-quality property should be between $1,200 and $1,500 per square metre.
“It will be great for our project if the government approves this proposal and we can sell our accommodation to foreigners, as well as wealthy Vietnamese customers,” Sun said.
Pumyang Construction has joined Vietnam’s Industrial Construction Joint Stock Company in developing an office and apartment complex in Ho Chi Minh City. With an investment of $14 million, the joint venture will build two 30-storey blocks of offices and apartments for sale and lease.
The news is also good for domestic investors. Le Trung Kien, Hanoi Land chairman of board of directors and vice director of the foundation group of Lilama Land, said: “This is great news for the real estate market in particular and the Vietnamese economy in general.”
“High-end customers, both Viet Kieu and foreigners who are working and living in Vietnam, are our direct clients.
“If the government let foreigners own property in Vietnam, it will be a big lever for economic development. If the rules operate well, they will allow great investment flows to pour into the country,” Kien said. He predicted that demand from foreigners will fall into two sectors - people who are working and living in Vietnam and a number of people who are living abroad but still want to own property in Vietnam. Kien said he was speaking with partners from Hong Kong and China about investing in Vietnamese property. “The market is very hot and investors are looking to buy here,” he added.
Richard Leech from the CB Richard Ellis, said the move, once approved, would not make strong impact to the leasing market. “The market is going to grow and the majority of people still want to lease. Not everyone will have demand to own a property,” he said.