On July 1, 2015, the new Law on Housing (LoH) and Law on Real Estates Business (LoREB) went into effect with foreigners allowed to purchase select properties in Vietnam. More than five years later, the ownership numbers are still relatively modest as only a select group of developers and agencies have attempted to capture this market.
Research from the Ho Chi Minh City Real Estate Association (HOREA) found that 12,300 units from a total of 17 real estate developers were sold to international buyers during the past five years. More than 10,000 of thes\ units were sold in Ho Chi Minh City.
“This figure was coming from 17 giant developers only. We estimate the real figures to be somewhere between 14,000 to 16,000 units from all developers,” Le Hoang Chau, HOREA Chairman, told the Vietnam Investment Review. “This figure was relatively modest compared to the 157,000 units built in the market every year.”
Two of the country’s largest developers, Vingroup and Novaland, sold the most units to foreigner buyers. Several projects in Ho Chi Minh City from these homebuilders saw their foreign ownership quota quickly snapped up. Currently, only 30 percent of units in government approved condominium projects can be acquired by foreigners.
The future of foreign property ownership in Vietnam
Many developers in Vietnam have been encouraging the government to loosen foreign property ownership regulations in order to attract more overseas buyers. Current laws state that international buyers cannot hold more than 30 percent of the units in a single residential building. Additionally, buildings must be approved for foreign ownership by the government before sales begin.
Overseas buyers are currently unable to own hospitality property in Vietnam, but this could be set to change.
“Recently, the Ministry of Construction proposed that foreigners be allowed to buy hospitality properties like beachfront villas, townhouses and condotels. This is something most experts believe to be in the best interest of the Vietnam property sector,” Nguyen Hoang, Director of the R&D Department at DKRA Vietnam, explained in an interview with Dot Property. “I suppose that this is a good suggestion that can not only boost the hospitality property sector, but also increase the competitiveness of the Vietnam real estate industry as a whole. Through this, the trend of worldwide integration would be proven and implemented.”
