More foreign investors could be lured to Vietnam with the help of foreign experts.
Figures released from the Ministry of Construction reveal that there has been a reduction in real estate stock. Estimated to be worth approximately VND 26 trillion, this represents a decrease of nearly VND 4.3 trillion. The segment that has been hit the most was the upper end of the market which is usually aimed at foreign investors. However, stock levels are still high. Plus there remains a distinct lack of affordable homes. Many developers avoid building for the lower end of the market due to the lack of incentives on offer.
Simultaneously pleas have been made for the need of more foreign experts within Vietnam’s real estate sector. Overseas investor numbers have crept up thanks to the country opening up its doors to foreigners. However there are still areas of potential that could be utilised to attract even more numbers. Foreigner experts are believed to be able to help with this.
Residential sales director at Savills, Nguyễn Khánh Duy, commented that it is important to cap the number of units a foreigner can own in a building. This will ensure that the domestic market is not negatively impacted. However the market needs even more attractive conditions to entice more foreigners. Further transparency will help to capitalise on foreign purchasing power.
This is especially important as the country is receiving unprecedented tourist numbers. Many of whom may wish to buy a holiday home in the country but are not in a position to invest as they do not meet buying requirements. It has been suggested that the legislation therefore may need to be adjusted. Vietnam will then be able to take advantage of overseas capital. There are 82,000 foreigners workers in the country and four million tourists arriving annually.
Savills state that the 2015 amendment of the Law on Housing which permitted foreigners to buy houses was a positive move. It has helped to develop the real estate market. However this may need adjusting as Savills cite that there is more demand from foreigners than actual supply due to limited availability dedicated solely for foreign investors.
