Vietnam property market back on its feet
Foreign real estate buyers are starting to take greater interest in the Vietnamese property market after a slew of legislative changes has given them a freer hand there, property group CBRE says.
In particular, a long-awaited and unprecedented change to Vietnam’s foreign ownership regulations, which came into force on July 1, 2015, revived the country’s property market. Most of the investors now attracted are from Singapore, Malaysia, Thailand, South Korea, Hong Kong and Japan.
“The relaxation of foreign ownership restrictions is more significant than previously anticipated and marks a strong step towards the opening up of Vietnam’s real estate market to overseas investment,” Marc Townsend, CBRE Vietnam’s Managing Director, said.
These positive factors created advantages for the real estate markets nationwide during the third quarter.
In Hanoi, a total of 9,160 new units were launched by 26 projects, doubling the figure from the same period last year. High-end apartments continued to account for a larger share of the new launch stock. For the first nine months of the year, the supply of high-end apartments accounted for 25 per cent of the total new supply, up from 20 per cent in the first half of the year, including about 2,900 high-end units were launched in the third quarter alone.
In Ho Chi Minh City, a total of 10,114 new units were launched in 26 projects as well, triple the number seen a year earlier, according to CBRE Vietnam.
Overall, the market sentiment remains relatively positive with good cash inflows. An estimated 7,862 units were sold during the quarter, up 88 per cent year-on-year. Continuing the trend from last quarter, high-end apartments still accounted for an increasing share of units sold. In the first nine months of 2015, high-end apartment sales accounted for 35 per cent, up from the 32 per cent reported last year.
The primary price in Vietnamese dong was on the rise in most segments, especially in high-end projects, by an average of 5.5 per cent year-on-year.
Details to Vietnam’s reformed Law on Residential Housing (LRH), in effect since July 1, 2015
- Foreign individuals who are granted a visa to Vietnam are allowed to buy residential properties in the country.
- All foreign investment funds, banks, Vietnamese branches and representative offices of overseas companies are eligible to buy.
- All types of residential sector including condominiums and landed property such as villa and townhouses – previously only applicable to condominiums.
- There is no limit on the number of dwelling units a foreigner can buy, but the total number of dwelling units owned by foreigners must not exceed 30 per cent of the total units in one condominium complex, or not exceed 250 landed property units in one particular administrative (or the equivalent of) ward – previously an eligible foreigner could buy only one condominium in Vietnam.
- The properties owned by foreigners can be sub-leased, inherited and collateralised – previously only for owner occupying purpose.
- The tenure allowed to foreign individuals buying homes is a 50-year leasehold with renewal possibility upon expiration, which remains unchanged compared to previously stipulated. Foreign individuals married to Vietnamese citizens are entitled to freehold tenure.
[caption id="attachment_26798" align="alignleft" width="300"] Ho Chi Minh City skyline with the Bitexco Financial Tower in the center, the country's tallest structure[/caption] Foreign real estate buyers are starting to take greater interest in the Vietnamese property market after a slew of legislative changes has given them a freer hand there, property group CBRE says. In particular, a long-awaited and unprecedented change to Vietnam's foreign ownership regulations, which came into force on July 1, 2015, revived the country's property market. Most of the investors now attracted are from Singapore, Malaysia, Thailand, South Korea, Hong Kong and Japan. "The relaxation of foreign ownership...
Foreign real estate buyers are starting to take greater interest in the Vietnamese property market after a slew of legislative changes has given them a freer hand there, property group CBRE says.
In particular, a long-awaited and unprecedented change to Vietnam’s foreign ownership regulations, which came into force on July 1, 2015, revived the country’s property market. Most of the investors now attracted are from Singapore, Malaysia, Thailand, South Korea, Hong Kong and Japan.
“The relaxation of foreign ownership restrictions is more significant than previously anticipated and marks a strong step towards the opening up of Vietnam’s real estate market to overseas investment,” Marc Townsend, CBRE Vietnam’s Managing Director, said.
These positive factors created advantages for the real estate markets nationwide during the third quarter.
In Hanoi, a total of 9,160 new units were launched by 26 projects, doubling the figure from the same period last year. High-end apartments continued to account for a larger share of the new launch stock. For the first nine months of the year, the supply of high-end apartments accounted for 25 per cent of the total new supply, up from 20 per cent in the first half of the year, including about 2,900 high-end units were launched in the third quarter alone.
In Ho Chi Minh City, a total of 10,114 new units were launched in 26 projects as well, triple the number seen a year earlier, according to CBRE Vietnam.
Overall, the market sentiment remains relatively positive with good cash inflows. An estimated 7,862 units were sold during the quarter, up 88 per cent year-on-year. Continuing the trend from last quarter, high-end apartments still accounted for an increasing share of units sold. In the first nine months of 2015, high-end apartment sales accounted for 35 per cent, up from the 32 per cent reported last year.
The primary price in Vietnamese dong was on the rise in most segments, especially in high-end projects, by an average of 5.5 per cent year-on-year.
Details to Vietnam’s reformed Law on Residential Housing (LRH), in effect since July 1, 2015
- Foreign individuals who are granted a visa to Vietnam are allowed to buy residential properties in the country.
- All foreign investment funds, banks, Vietnamese branches and representative offices of overseas companies are eligible to buy.
- All types of residential sector including condominiums and landed property such as villa and townhouses – previously only applicable to condominiums.
- There is no limit on the number of dwelling units a foreigner can buy, but the total number of dwelling units owned by foreigners must not exceed 30 per cent of the total units in one condominium complex, or not exceed 250 landed property units in one particular administrative (or the equivalent of) ward – previously an eligible foreigner could buy only one condominium in Vietnam.
- The properties owned by foreigners can be sub-leased, inherited and collateralised – previously only for owner occupying purpose.
- The tenure allowed to foreign individuals buying homes is a 50-year leasehold with renewal possibility upon expiration, which remains unchanged compared to previously stipulated. Foreign individuals married to Vietnamese citizens are entitled to freehold tenure.
