Vietnam to mark off areas forbidden to foreign homebuyers

Vietnam may soon define which residential areas will be off-limits to foreign homebuyers on the grounds of national security, more than a year after the relaxation of ownership restrictions took effect and gave the market a jolt.

The Ministry of Construction has recently sent an official request urging the ministries of national defense and public security to promptly demarcate any zones that should be kept out of bounds for foreign ownership.

The issue has been mostly left untouched since legislators updated the Housing Law in 2014.

Under the amended law, foreign investment funds, foreigners with valid visas, international firms operating in Vietnam and overseas Vietnamese have been allowed to buy residential properties.

For the first time they can own the property for a maximum of 50 years and have the same rights to lease, transfer or sell it as Vietnamese citizens.

The changes came into effect in July 2015 and were widely perceived as good news for the local housing market.

However, the restriction regarding residential areas deemed critical to national security has never been explicitly clarified.

As a result, many cities and provinces are sometimes uncertain about which projects or areas are strictly off-limits to foreign buyers.