Proposals to open Vietnam to foreign property investors are being pushed by Nguyen Tan Dung, Vietnam’s Prime Minister. At the present it is difficult for foreigners to buy property in Vietnam, and impossible for any other purpose than to actually live in them, i.e., buy-to-let deals are not allowed. No date has yet been set for the National Assembly to vote on the new proposals but it is expected that, if passed, they would come into effect from July 2014.
Important proposals include:
- Any foreigner in Vietnam with a visa valid for 3 months or more will be allowed to buy property
- As well as the condominium units now available for foreign ownership, town houses and villas (with up to 500 sq m of land) will also become available
- Foreigners will, for the first time, be allowed to own more than one property, and will be allowed to lease to tenants
- The current leasehold ownership limit of 50 years will be extended to either a straight 70 year period, or a 50 year period with the right to extend by a further 50 years
“Allowing for a 50-year lease plus a further 50 years, or straight 70 years lease and allowing the right to lease out are all game changers for foreign investors,” says Marc Townsend, managing director of CBRE Vietnam.
Official figures indicate that the luxury market is picking up.
For example, Da Nang, frequently described as the next high-end luxury focal point in Asia, is showing signs of increased buyer activity at the top end of the market. Properties starting from $200,000 all the way up to $3,000,000 or so have been selling at an encouraging rate for the past few months. Figures from the Ministry of Planning have shown that foreign investors have targeted the top end of the market in Vietnam in previous years, so the new activity in Da Nang may well be driven, in part, be speculation of a demand-fuelled boom in prices once the new real estate proposals come into effect.
Peter Ryder, CEO of Indochina Land, a company that has recently launched a large top end development in Da Nang has stated "Right now we're at an inflection point with supply and demand….. but I see demand outstripping supply within the next 12 months."