Why are foreigners’ house purchases proceeding at a sluggish rate?

TIN LIÊN QUAN
	New policies take effect in February 2017

A report shows that foreigners spent 153 billion USD to buy real estate in the US in 2016, including 3.06 billion USD spent by Vietnamese. A question has been raised about why the amount of money did not flow to Vietnam for house purchase deals.

It took Vietnam tens of years to come to the decision on allowing Viet Kieu (overseas Vietnamese) and foreigners to buy houses in Vietnam.

The 2014 Housing Law allowed more foreigners to buy houses in Vietnam. (Photo: Real Estate Magazine)

Data show that the number of expats in Vietnam in 2016 increased to 320,000. The figure continued to increase in 2017, leading to more foreigner demand for houses.

In HCM City, in the last six months of 2015 alone, more than 1,000 apartments were sold to foreigners, four times higher than the number of apartments sold to foreigners in the combined five years before.

However, there are no official statistics about the number of houses/apartments sold to foreigners and overseas Vietnamese.

The initial goal of the policy on allowing foreigners to buy houses in Vietnam was to create favorable conditions for individuals and organizations to live and work in Vietnam. Thus, the policy, at first, did not aim to influence the real estate market.

However, the new Housing Law is praised as an important policy to defrost the real estate market, make the investment environment more attractive and help handle bad debt more effectively.

In the past, expats in Vietnam could only buy houses if they lived in Vietnam for more than one year. But now, foreigners can buy houses in Vietnam if they are allowed to enter the country.

However, despite the open legal framework, foreigners and Viet Kieu are still hesitating to buy houses in Vietnam, partially because they fear changing policies. They also have to follow too many complicated procedures to buy houses.

In HCM City, Phu My Hung urban area is the most attractive area in the expat community. At least 40 percent of 30,000 people living there are foreigners from 20 countries and territories.

Since the Housing Law took effect in July 2015, 549 land-use right certificates (red books) have been issued to foreign individuals and institutions who have bought houses in Vietnam.

Over 313,700 national contributors’ family to enjoy housing support Prime Minister Nguyen Xuan Phuc has issued a resolution on housing support for revolutionary contributors, which will benefit 313,707 households.