Stagnant property market, especially the luxury segment, would receive a boost if it is easier for expats to buy homes in Vietnam
|An apartment in Ho Chi Minh City's Phu My Hung Urban Area where many foreigners live. Experts and insiders are urging relaxation of strict conditions imposed on foreigners buying houses in Vietnam.
Vietnam should loosen regulations to meet genuine demand among foreigners to buy houses in the country as a measure to revive the country's stagnant property market, many experts and industry insiders say.
Alan Phan, a Viet Kieu (overseas Vietnamese) in the US, said he and many of his friends want to buy a house in Vietnam because of their love for the motherland but they were unable to do so because of stringent regulations.
"Around 30-40 percent of my Viet Kieu friends are eligible to buy a house in Vietnam. Others had to ask their relatives in Vietnam to hold the house ownership," he said.
The barriers have limited demand while the real estate market remains stagnant, he said.
A law that took effect in 2009 on a five-year trial basis allows each foreigner to buy an apartment in Vietnam with strict conditions.
They are allowed to own apartments but not houses, and each foreigner is only allowed to own one apartment that cannot be leased or sold. They have to sell or give it to others after 50 years the general time limit to own an apartment in Vietnam.
The document stipulates five categories of foreign individuals and organizations eligible to own apartments.
These include individuals who invest directly in Vietnam or who are hired to management positions by local or foreign-invested companies in the country; foreigners who receive certificates of merit or medals from the president or government for their contributions to the country; foreigners who work in socioeconomic fields, hold a bachelor's degree or higher, and who possess special knowledge and skills that Vietnam needs; foreigners who are married to Vietnamese nationals; and foreign-invested enterprises operating in Vietnam that need to buy houses for their employees.
The foreigners should be legal residents in Vietnam and have lived here for at least one year at the time of purchasing the apartment.
By last February 1, more than four years since the trial law took effect, just 427 foreigners had bought houses in Vietnam, 342 of them in Ho Chi Minh City.
This is a very small number considering more than 80,000 foreigners live and work in the country, according to the General Department of Land Administration.
A representative of the HCMC-based Phu My Hung Corporation said many foreigners and Viet Kieu living in District 7's Phu My Hung Urban Area want to buy a house there. However, only those getting married to a local spouse have managed to do so.
Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, said foreigners should be allowed to buy houses in zoned areas.
"In Singapore, foreigners are allowed to buy unlimited commercial houses and the government collects relevant taxes. Thus, the property market develops while the government has more income."
He said it is unreasonable not to allow foreigners to lease or sell their property.
"Many experts have said allowing them to lease or sell the houses will stimulate demand in the luxury property segment which has been most stagnant.
"We should not be overanxious about foreigners owning property [in Vietnam] because they cannot take a house or a land plot abroad," he said.
Park Jong-woo, deputy director of the Hung Viet and KRDF03 Company, said Vietnam should expedite the process of issuing apartment ownership certificates. His company is the investor in The Eastern apartment project in HCMC's District 9.
"Normally, it takes two years to issue the certificate and many foreigners can't wait that long. This long process makes them think twice before deciding to buy a house in Vietnam."
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