Amendments to the housing law permitting foreigners to buy have given the real estate market a new lease of life.
One Filipino businessman told VET that he was inspecting villas at Flamingo Dai Lai as the amended Law on Housing, which permits foreigners to buy houses in Vietnam, takes effect on July 1. “The quality of property in Vietnam is rising to international standards, especially with real estate investors targeting foreigners who wish to own a house in the country,” he said.
On recent business trips, he added, he has seen many posters and banners at the airport advertising villas and apartments. “Advertisements about Vietnam’s real estate are also appearing more widely on international media,” he said. Vietnam’s real estate market is going through a period of unprecedented vibrancy as real estate companies prepare to do business with foreign homebuyers.
Under the amended Law on Housing foreigners will be allowed to own houses in Vietnam with leaseholds of 50 years, extendable for a further 50 years, but as a whole must not own 30 per cent of apartments in any one block.
VinaCapital was among the first real estate investors to get preparations underway quite early to attract foreign homebuyers. In its sales campaigns it has introduced special programs for foreigners and overseas Vietnamese to buy apartments at its Azura luxury apartment project in central Da Nang city. According to Mr. David Blackhall, Managing Director of VinaCapital’s Vinaland Investment Fund, with the greater number of enquiries as July 1 approaches it designed a memorandum of understanding to provide first right of refusal to these potential buyers.
“This is an effective strategy to complement the current sales program, which continues to see the vast majority of apartments being sold to local Vietnamese buyers,” he said. He also revealed that the company has secured three such buyers to date, with an additional six deals still under negotiation.
In Hanoi, the Hoa Binh Group was the first investor to adopt concrete plans to sell houses to foreigners. Though still selling to Vietnamese customers it has left a relatively large number of houses in its Hoa Binh Green City project in Minh Khai Street available to foreign homebuyers and overseas Vietnamese. Mr. Nguyen Huu Duong, General Director of the Hoa Binh Group, told VET that the company is speeding up construction of the H2 block so that apartments can be handed over to customers next month, which coincides with the introduction of the amended law.
At a presentation introducing the affordable housing of the National Housing Organization (NHO), a representative of the project said that in addition to low-income earners the company and Vietcombank also target foreign customers. Vietcombank has been in the process of creating a program helping foreigners access mortgage packages in the project, with flexible payment methods similar to those for its Vietnamese customers.
It’s clear to see that the amendments are having a positive influence on the country’s real estate market. According to Ms. Duong Thuy Dung, Head of CBRE’s Research and Consulting Department, many enterprises in Ho Chi Minh City are planning to advertise their products overseas. “One investor, a partner of CBRE, said he will directly market the project in Singapore rather than simply waiting for customers to come,” she said. “The new law has given many real estate companies the momentum to develop and expand their projects.”
While the amendments are more likely to attract interest among expats living and working in the country, they also ease the way for foreigners planning to invest in the property market. Taken overall, the amendments are putting the country’s real estate market in a more positive frame of mind.