Caution urged in relaxing foreigner property rules in VN

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Savills Vietnam senior director Su Ngoc Khuong said it was necessary to raise favourable conditions for foreigners to own houses to attract foreign investment inflow. INFONET.VN/VIET NAM NEWS

Vietnam's Ministry of Construction’s proposal to allow foreigners to buy tourism property developments in the country needs careful consideration, experts have said.

The ministry recently proposed amending laws on housing and real estate business, allowing foreign individuals and institutions to buy tourism property developments to aid the declining market.

It also proposed that foreigners should be allowed to buy more apartments in a building than the current cap of 30 per cent.

Under the Law on Housing, foreigners can only own apartments for residential purposes, said the ministry’s Housing and Real Estate Market Management Agency.

It said recent years had seen increasing demand from foreigners to buy apartments for business purposes, such as tourism property.

The Vietnam Real Estate Association (VNREA) said allowing foreigners to own non-residential apartments would help attract a significant sum of investment into the real estate market.

Still, it said it was necessary to manage by regulations conditions for foreigners to be eligible for buying non-residential houses in the country.

VNREA deputy secretary-general Nguyen Van Dinh said allowing foreigners to own tourism property developments would promote the development of the real estate market, especially in the context that the tourism property market was hit hard by the Covid-19 pandemic.

The VNREA said this would also be a long-term solution for Vietnam to become a destination for vacation, retirement and investment into real estate from foreigners.

Su Ngoc Khuong, senior director of Savills Vietnam Co Ltd, the Vietnamese unit of the UK-based real estate services provider, said selling houses to foreigners should be seen as a form of export to draw foreign investment into the country’s real estate market.

He said it was necessary to raise favourable conditions for foreigners to own houses to attract foreign investment inflow.

The inflow of foreign investment into tourism property market would push the real estate market development, improve liquidity as well as attract more tourists and accelerate the tourism industry, said Khuong.

He said it would also promote diversification of tourism property products and improvements in product quality.

The cap of 30 per cent, more or less, was not really important, he said, adding that it was more important to regulate which property products foreigners were not allowed to own to ensure national defence and social security.

Huynh Tan Vinh, director-general of Furama Resort in Danang city, said many countries allow foreigners to buy tourism property developments to attract investment into this segment, adding that there would be increasing interest from foreign investors in Vietnam’s tourism property market if the proposal was approved.

Tran Xuan Tay, bureau chief at the Khanh Hoa provincial Department of Natural Resources and Environment, said opening doors for foreigners into the tourism property market was necessary but regulations on eligibility must be clarified.

Tay suggested allowing foreigners to own non-residential property for a certain amount of time, such as 50, 70 or even 90 years.

Danang Real Estate Research and Training Institute director Nguyen Duc Lap said the government should clarify areas and projects in which foreigners were allowed to buy apartments.

Detailed instructions about granting ownership certificates for foreigners should also be issued, experts said.

VIET NAM NEWS/ASIA NEWS NETWORK