Purchasing power of overseas Vietnamese: Big boost for local real estate
It is estimated that one-fifth of all expatriate Vietnamese want to buy homes in the country.
The amended Land Law, which will take effect on January 1, 2025, is expected to boost Vietnam's real estate sector by attracting a huge amount of capital from overseas Vietnamese.
According to business insiders and lawmakers, the amended Land Law, which was approved by the National Assembly at its extraordinary session in January, is a great improvement over the previous version promulgated in 2013.
| Buyers look for information about an apartment project in Hanoi. Photo: Tuan Anh/The Hanoi Times |
According to Article 4 of the revised Land Law, overseas Vietnamese are those who have resided in other countries with or without Vietnamese nationality. They will have full rights and obligations as residents in purchasing housing in Vietnam.
They can buy, rent, and lease land as part of their real estate rights. Overseas Vietnamese are allowed to use their land as collateral in business contracts.
According to business insiders and experts, the revised Land Law will allow overseas Vietnamese to conduct land transactions in Vietnam directly. Previously, they had to be represented by local relatives or acquaintances to handle the deals on their behalf, which led to legal disputes when it came to reclaiming property rights.
Peter Hong, President of the Overseas Vietnamese Businessmen Association, said overseas Vietnamese who want to return to Vietnam and buy local property face many obstacles.
There are now about 6.5 million overseas Vietnamese and their descendants, of whom more than 20% are interested in buying property and living in Vietnam, he said.
Official data from the Ministry of Construction shows that about four million foreigners and overseas Vietnamese are interested in buying Vietnamese homes in the future. The ministry also believes that a greater inflow of FDI capital into Vietnam will make the country's housing market more attractive to potential international buyers.
Legal advisor Nguyen Van Dinh said the revised Land Law will ease the conditions for Vietnamese and overseas Vietnamese to own local housing, thus increasing demand and boosting the real estate market.
Vo Huynh Tuan Kiet, Director of residential project marketing at consultancy firm CBRE Vietnam, said demand from overseas Vietnamese buyers is rising sharply. Over the past 10 years, CBRE Vietnam has brokered 5,000 deals in the Vietnamese property market, 45% of which involved foreign and overseas Vietnamese buyers.
"With high-end products now accounting for a large proportion of the market supply, we expected the easing of regulations to give a big boost to the sector," he said, noting that this (the revised amended land law) is a good way to attract talent from abroad, as highly skilled talents will come and seek long-term careers in Vietnam. In this case, their demand for quality accommodation will increase and boost the market.
Economist Dinh The Hien said people living abroad without Vietnamese citizenship would not be able to buy local property if the previous version of the law remained in place. "It does not define and clarify what it means to be an overseas Vietnamese. Meanwhile, it is complicated for them to prove that they are Vietnamese or of Vietnamese descent."
Overseas Vietnamese had to ask their relatives or acquaintances to sign contracts on their behalf, making the situation difficult to resolve if the trustees took advantage of their positions and claimed the properties for themselves, he said.
"The revised land law will put domestic and foreign buyers on an equal footing," Hien emphasized.
Meanwhile, Nguyen Anh Que, Chairman of G6 Group, believed that a more transparent and fair market would encourage more overseas Vietnamese to come back and pour money into Vietnam's housing market.
"The property market will get a boost from our overseas residents. Their purchasing power can absorb the supply, which is now excessive," he said.
