Policy adjustments needed to lure FDI to real estate sector: Experts

The Foreign Investment Agency under the Ministry of Planning and Investment reported that in the six months, FDI poured into the domestic real estate market stood at US$1.53 billion, down 51.5% year-on-year, depriving it of the second place in terms of investment attraction.

Experts blamed the decrease on supply crunch and land scarcity, which have forced foreign developers to turn their eyes to mergers and acquisitions (M&A) projects in Vietnam.

Besides, both domestic and foreign businesses are hesitant about investment due to legal obstacles, they added.

Nguyen Ngoc Tu, a lecturer at the Hanoi University of Business and Technology, told Lao dong (Labour) Newspaper that it is necessary to create a competitive and open business environment to facilitate the operation of enterprises.

Regulations and standards should be set out to select environmentally-friendly foreign investors who use high-tech and can resist external shocks, he stressed.

Trang Le, senior director at JLL Vietnam – a real estate services firm – suggested Vietnam improve its infrastructure in service of the sector and streamline it administrative procedures which, she said, must be done in reality, not in paper.

Others proposed the Government issue documents detailing the role and responsibility of the personnel reviewing, appraising and approving dossiers in order to accelerate the work.

According to the Foreign Investment Agency, among the 48 countries and territories investing in Vietnam’s real estate market, Singapore took the lead, followed by the Republic of Korea (RoK) and Japan.

Foreign investments have flown into 45 cities and provinces, of which Ho Chi Minh City holds a lion's share with US$16 billion (24.7%), followed by Hanoi, and the southern provinces of Binh Duong and Ba Ria-Vung Tau.