OVs voice concerns over ownership rules

According to economic expert Dinh The Hien, under the revised Housing Law 2014, overseas Vietnamese must present their identity card, birth certificates, family declaration, and personal registration when they want to buy a house in Vietnam.

However, many overseas Vietnamese who have lost some or all of this documentation have found that they are unable to prove their Vietnamese roots and so are ineligible for property ownership here.

“I suggest that they should be allowed to use other kinds of documents, such as their immigration permission documents instead,” Hien said at a Ho Chi Minh City seminar held last week to discuss regulations allowing foreigners and overseas Vietnamese to buy properties in Vietnam.

Regarding the issue of ownership duration, the revised law stipulates that foreigners and overseas Vietnamese are allowed ownership for 50 years. However, if they sell their properties to someone else, the new owner will only retain ownership for the remaining portion of the initial 50 years.

“This regulation would discourage foreigners when re-buying properties. We suggest that the time should be kept unchanged at 50 years for any new buyers,” Hien said.

Meanwhile, the limitation that foreigners can buy a maximum of 250 units in a single project, or 30% in a certain area, would discourage large-scale investors, especially those who plan to develop buildings which are targeted especially at foreigners, as it the case in other countries.

“The government should permit some projects which are not located in sensitive locations to increase the proportion sold to foreigners,” said Hien.

With more than 4.5 million people, overseas Vietnamese represent a massive potential customer base for real estate in Vietnam, according to Hien. Every year, more than US$12 billion in remittances is transferred to Vietnam. Of this figure, more than 20% is poured into the real estate market.

Meanwhile, more than 80,000 foreigners are living in Vietnam. Among this number, around 21,000 foreigners are eligible to buy real estate in the country. The largest community is from the Republic of Korea, followed by those from western countries, Indians, Singaporeans, and Chinese.

The market in Hanoi and Ho Chi Minh City contains over 10,000 high-end units, which are quite modest compared to the demand, and this suggests room for the development of this segment.

Nguyen Nam Hien, general director of Hung Thinh Land said that to encourage more foreigners to buy houses in Vietnam, they should be allowed easy access to loans from banks.

A range of other developers are preparing products to keep up with the demand from foreigners and overseas Vietnamese. Such major players include Vingroup, NovaLand, VinaCapital, Phu My Hung, Hung Loc Phat, and Khang Dien.

According to figures from the Ministry of Construction, as of August 2015, more than 400 foreigners were granted red books for apartments, while more than 500 overseas Vietnamese now own houses in Vietnam.

The new Housing Law permits unlimited foreign ownership of properties for sub-leasing, mortgaging, and bequeathing. This covers foreign individuals as well as entities such as investment funds, banks, and companies, and is widely seen as a boost for the residential sector-in particular the high-end property segment-of which, up to 10% is now predicted to come from foreign investment.