Vietnam’s real estate market has become one of the most attractive markets in the region after the loosening of restrictions of foreign ownership of properties, said JLL Vietnam
Director Greg Ohan, advising foreigners to buy housing now.
One year and a half after the approval of the amended Housing Law, which addresses the issue on foreign ownership of properties, this single piece of legislation, together with favorable market conditions, has helped to drive the Vietnam real estate market from what was considered toxic oblivion pre 2015 to becoming one of the more attractive markets in the region.
“You want to know the best thing about it? Now foreigners have a slice of the pie – well, perhaps more of a bite than a slice,” he said in a blog post.
JLL Vietnam Director Greg Ohan.
The Vietnam residential market had seen very sluggish growth leading up to 2015 due to a number of factors including the previous restrictions on foreign ownership; the lack of quality developments; a speculative bubble from 2006 to 2008; the small size of the leasing market and more attractive and transparent investment opportunities elsewhere in the region.
However, the new legislation played a major role in addressing many of these issues and even removed some of those cumbersome conditions that foreigner’s previously faced making Vietnam somewhat “sexy” again.
“Opening the gates of the local property market wider to foreigners proved to be a very positive step in the right direction and it could not come sooner as far as I’m concerned,” Ohan commented.
However, with the gate swung open, affordability now reigns as the major issue impacting investors as property prices in Hanoi
and Ho Chi Minh City
have hit record highs, he noted.
“If my own experience is anything to go buy, I would say positive. Having spent almost 6 years living and working in Vietnam I took the dive to invest in Vietnam property myself. I was actually one of the first handful of foreigners who took advantage of the new foreign ownership legislation. The fundamentals worked for me,” he said.
Under the new legislation, all foreigners who are granted a visa to Vietnam with maturity of more than three months are allowed to buy residential properties in the country. All foreign investment funds, banks, Vietnamese branches and representative offices of overseas companies are eligible to buy.
There is no limit on the number of units a foreigner can buy, but the total number of dwelling units owned by foreigners must not exceed 30% of the total units in one condominium complex, or not exceed 10% of landed property within a development project.
The properties owned by foreigners can be sub-leased, inherited and collateralized (previously only for owner occupying purpose and not to be rented out).