Vietnam’s property market is heating up, thanks to strong economic growth, and a growing middle-class, after almost five years of a housing slump – but most important is the new Housing Law and the Law on Real Estate Business. These came into effect in July 1, Protected content , and allow foreigners and overseas Vietnamese to legally own, sell and transfer real properties.
The market is not yet “really hot” according to some – but it is heating up.
The new Housing Law has potentially enormous significance.
First, it removes critical obstacles to foreign property ownership. Foreigners who have been granted a Vietnamese visa, plus foreign investment funds, banks, Vietnamese branches and representative offices of overseas companies can now purchase residential property.
Foreigners can now own all types of properties, including condominiums and landed property such as villas and townhouses. The properties owned by foreigners can be sub-leased, inherited and collateralized.
Second, overseas Vietnamese who have maintained their Vietnamese citizenship will be treated like locals and are permitted to own unlimited property in their own names.
It is estimated that about 70% of the 4 million overseas Vietnamese around the world still maintain their original citizenship.
Until now, Viet kieu (overseas Vietnamese) and foreigners could only buy one apartment in Vietnam each. The conditions were strict, favouring only those married to Vietnamese nationals, holding managerial positions, or having contributed to the country. These criteria enabled only around Protected content , out of around 80,000, to buy an apartment in Vietnam.
The revised housing law is revitalizing the property market and sending a broader message that Vietnam is open for business. “The government is looking at ensuring that Vietnam continues to be competitive, continues to be attractive to foreign investors, and to create an environment where business can thrive,” said David Lim of ZICOLaw Vietnam.
“There are 4.2 million Vietnamese overseas and about 30,000 foreign executives working here long-term,” said Le Hoang Chau of Vietnam’s Real Estate Association. “That shows potential for a bright future.”
“From my own analysis, from now till the end of Protected content , the domestic real estate market will be getting hot because foreign capital flowing into the market is quite huge,” said Dr. Nguyen Tri Hieu of An Binh Commercial Bank. “In particular, at the end of the year, the community of overseas Vietnamese who want to buy houses in big cities will be very high.”
In Ho Chi Minh City, Vietnam’s most populated city, sales volumes in H Protected content exceeded total sales during Protected content . “I can sell about three to five units per month now, much better than before, when I could only sell the same in the whole year,” said Dung, a property broker.
Prices of high-end residential properties increased 3.2% q-o-q in Q Protected content , according to CBRE Vietnam.
In Hanoi, Vietnam’s capital, the average price of newly launched high-end condominium units rose by 2% during the year to Q Protected content , while prices of low-end condo units increased 3%, according to Colliers International. During the latest quarter, prices of new condo units increased 1% in Q Protected content .
And several high-end residential projects in Hanoi saw price rises of about 4% to 6% y-o-y in the first half of Protected content , according to CBRE Vietnam.
The upward momentum in residential property prices in Hanoi was also supported by Savills World Research.
The average price of existing townhouses increased 0.9% q-o-q in Q Protected content , to VND60.3 million (US$2, Protected content sq. m.
Villa prices rose by 0.1% to VND48.8 million (US$2, Protected content sq. m. over the same period
New apartment prices in Hanoi also increased 1% q-o-q in Q Protected content
Prices of existing apartments rose by 2% q-o-q in Q Protected content
The national figures show greater diversity. In Tay Ho and Hoan Kiem, the average price of existing apartments rose by 7% q-o-q in Q Protected content . On the other hand, Ba Dinh and Dan Phuong saw the biggest quarterly decline of 4% over the same period.
Property prices are expected to continue rising during the remainder of the year. Vietnam’s economy expanded by 6.44% from a year earlier in the second quarter of Protected content , the highest growth in five years, according to the General Statistics Office (GSO).
The economy is projected to expand by 6.2% this year, up from 6% in Protected content , 5.4% in Protected content , 5.2% in Protected content , 6.2% in Protected content 6.4% in Protected content , according to government forecasts.
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