A bill drawn up by the Ministry of Construction to allow foreigners to own houses has been mostly hailed by expatriates though there are also cautionary voices.
The draft bill that will come up before the National Assembly identifies six categories of foreign ownership, five individual and one corporate.
Thomas Speeger, executive director of the German Business Association in Vietnam, said it would offer an alternative to leasing for expats who pay US$3,000-4,000 a month on average.
"We think this makes the market for Vietnamese real estate larger and more international in scope," said Rick Mayo-Smith, a founder of Indochina Capital.
He said foreigners were able to buy and sell houses freely in many countries like Thailand, Malaysia, the US, and Britain and these markets were performing well and efficiently.
"This is a big incentive for foreigners to invest and stay in Vietnam. The people and government are very friendly and respected by foreigners."
Tom Miller, an American attorney with Miller & Ngo, said it was anyway hard to stop foreign buyers from buying for commercial purposes, and controlling it just opened up more possibilities for corruption.
Terence Anderson, general director of AIG General Insurance Vietnam Company, shrugged off worries that the law would add more heat to the property market which is already sizzling due to a bulging demand-supply gap.
"Vietnamese consumers are driving demand and foreigners will have only a small impact on the market, though they may have a bigger impact on the resale market," he said.
Mayo-Smith concurred adding foreign buyers might take up the slack when an expected housing glut hit in three years' time.
He said the country would see over 15,000 high-end housing units entering the market every year for the next five years.
If foreigners hope to have their own houses when they invest in Vietnam, clearly the move will spur investments.
Speeger from the German Business Association said though it would not be the main reason for attracting foreign investors, it would make things easier for them and make Vietnam more attractive as an investment destination.
Anderson believed it would make foreigners consider Vietnam as a retirement destination if they were allowed to own housing.
SIX CATEGORIES OF FOREIGNERS ELIGIBLE TO BUY HOUSES:
â– People coming to Vietnam for direct investments.
â– People who have contributed to Vietnam and have been honored by ministries or higher-ranked agencies.
â– Cultural and scientific experts.
â– People married to Vietnamese citizens and living in Vietnam.
â– Honorary citizens.
â– Foreign-invested enterprises not operating in the property sector.
Not unmixed blessing
Miller was the only one with a word caution.
"Vietnamese owners may be able to profit more, but owner-ship of land by foreigners may have unexpected consequences."
When Mexico threw open its farmlands to foreign buyers following a North American trade treaty, farmers were forced to sell their lands once corn prices dropped due to the introduction of cheap, subsidized US corn.
These same farmers were now standing on corners thousands of kilometers away from their families, looking for day work in the US, he said.
US and international corporations controlled vast tracts of lands which had supported Mexico's population for centuries but was now used to generate profits for giant corporations.
"Opening up Vietnam to the world market must be done carefully with full awareness of the consequences," he warned.
""˜Free trade' is not necessarily "˜fair trade'," he said.