Housing market has great appeal for foreigners after law changes

Housing market has great appeal for foreigners after law changes

The real estate market, especially the high-end segment, has seen a revival and is likely to develop strongly from here thanks to the amendments to the Housing Law that permits foreigners and overseas Vietnamese to buy housing since July 1st, experts have said.

High demand

In the second quarter some 4,500 high-end apartments were sold in HCM City.

The Ha Noi market is also picking up steam, with 30 percent of the 1,518 new apartments launched being in the luxury segment. This represents a three-fold rise from the previous quarter and is the highest level for the quarter since 2012.

Gateway Thao Dien in the southern metro is a clear example.

Jointly developed by Hamon Developments (headquartered in Hong Kong) and SonKim Land, Gateway Thao Dien sold 50 percent of its units within 50 days since its private preview took place in the end of this May.

They said buying apartments and houses has never been so simple for foreigners and overseas Vietnamese.

From July 1st, following the changes to the law, foreigners and overseas Vietnamese need just a visa to buy and own property in Viet Nam.

They can buy, lease out, gift and inherit property.

One of a few limitations is that their combined ownership should not exceed 30 percent of an apartment project.

Potential interest

Foreigners who have bought houses and apartments in the country uniformly believe that investment in the Vietnamese housing sector is lucrative.

While prices are lower than that in neighbouring countries, returns are higher, they say.

Lu Chin Yu, an investor from Hong Kong gave an example: "The investment cost in Viet Nam is lower than that in Hong Kong. The average return, however, is higher at about 7 percent."

Banks only pay 2 percent interest on deposits in Hong Kong, he said.

His research showed that the housing market in Viet Nam is now stable meaning the risks are not high, he added.

Lu's points show clearly why many overseas Vietnamese and foreigners consider Viet Nam an ideal investment destination, and they all prefer the high-end segment.

The developers of the Gateway Thao Dien said in the earlier phases of sales most of their buyers had been foreigners even before the amendments had come into effect.

They said the apartment is located in a place where a number of foreigners, especially the Western live since it is near the best international schools and restaurants.

However, over the years many just rented apartments because it was not easy for them to buy then. So with the launch of Gateway and the laws just changed, unsurprisingly a lot of the buyers are foreigners.

Nguyen Kim Anh, a customer from District 2 who recently bought a two-bedroom apartment, said, "the project has a safe and refined living environment.

It is near the city centre. I have seen many projects, but Gateway Thao Dien is the best for me."

Kim Anh added that the project has a high return.

"I will lease my apartment. In five years I will consider selling it if the value appreciates," she said.

bizhub