Vietnamese lawmakers approved a law allowing broad foreign ownership of property, as the government seeks to boost an ailing real-estate market and accelerate economic growth.
Foreigners with a valid visa as well as foreign companies and international organizations operating in Vietnam now will be permitted to purchase houses and apartments. Current laws restrict ownership to foreigners married to Vietnamese and those foreigners deemed to make significant contributions to the nation’s development.
The law is the latest government move to help bolster the property market, following a housing stimulus program and a low-cost home loan package. Vietnam is stepping up efforts to boost economic growth to 5.8 percent this year and clear up bad debts in the financial system, some of which are tied to property.
“It is a very helpful move, a good change of policy to open up the real estate sector not only for overseas Vietnamese, but also for foreigners,” said Alan Pham, the Ho Chi Minh City-based chief economist at VinaCapital. “It projects an image of an opening of the economy to foreign capital, and it might help the bad debt problem.”
The new rules also allow maximum foreign ownership of 30 percent in any apartment building or 250 houses in a ward.
The real estate market remains frozen and parts of the sector are unlikely to bounce back soon, the World Bank said in a July report.
“Expanding the criteria for people to buy and own houses in Vietnam aims to create favorable conditions to draw foreign investment,” Uong Chu Luu, National Assembly’s vice chairman said in a statement released at the legislature yesterday.
Under Vietnam’s constitution, all land belongs to the state. Land-lease certificates good for a maximum of 50 years are granted in real-estate purchases.