A total of 22 new residential developments in Hanoi have received approval for foreign ownership in a move that could possibly signal an easing of restrictions in Vietnam. Both completed and unfinished projects are included in the announcement which will be welcomed by developers who continue to see significant demand from overseas buyers.
Hanoi approved foreign ownership at 26 residential developments between November 2019 and May 2020. The bulk of overseas demand comes from the employees of South Korean and Japanese companies operating in Vietnam as well as the Vietnamese diaspora living in the United States and Europe.
“Expats who have long-term projects in Vietnam and those with Vietnamese spouses prefer buying a house to renting, while the Vietnamese diaspora with money consider property in their home country an investment,” Su Ngoc Khuong, Senior Director of Savills Vietnam, told the VN Express. “As Vietnam seeks more foreign direct investment, it should give high-skilled foreign laborers more opportunity to own property.”
Current foreign property ownership regulations in Vietnam state that international buyers cannot hold more than 30 percent of the units in a single residential building. Developers must also obtain permission from the government before selling units to foreign buyers.
Vietnam Insider reported that projects from CapitaLand and Van Phu Invest were among the 22 developments approved for foreign ownership. All projects made available to overseas buyers are in the luxury segment.
The move comes after the Vietnam Association of Realtors urged to government to ease restrictions on foreign property ownership in the country. The luxury segment in both Hanoi and Ho Chi Minh City is oversupplied due in part to Vietnam’s foreign property ownership regulations. Developers have noted the issue could be rectified by making more units in this segment available to overseas buyers since demand from this group far outstrips supply.
