Real estates for foreigners, especially high-end and super luxury segments will be the highlight of the real estate market in 2019. However, there are still many regulations and procedures related to the rel estate ownership proces for foreigners needing to be addressed.
Time of high-end real estate
Currently, new house prices in central area of Ho Chi Minh City are keeping an average of $ 5,500 – 6,500/m2, which is a fraction of the price of Hong Kong – where houses are always at a record high price. Besides, the demand for real estate investment in Vietnam has increased significantly since the housing ownership policy for foreigners came into effect in 2015. This will be the motivation for this segment to continue growing in 2019.
CBRE’s statistics showed that in the first 9 months of 2018, the proportion of foreigners buying apartments based on CBRE’s transactions accounts for 76%, of which 31% came from China. In fact, the number of Chinese tourists who are interested in luxury real estate, especially in HCMC has been increasing over the years. If 2016, the successful luxury apartment transactions of CBRE in Ho Chi Minh City were Chinese only taking account for 2%; by 2017, this number was 4%; in the first 9 months of 2018, the proportion of buyers with Chinese nationality lead up to 31%.
In the past, foreigners buying houses were mainly those living and working in Vietnam for a long time; now, thanks to the investors’ active marketing in foreign markets, foreign individual investors know more about Vietnam and many of them have decided to buy even if they have never set foot in Vietnam.
According to the Investment and Trade Working Group, Vietnam Business Forum (VBF 2018) in the VBF report in December 2016, Vietnam has made great strides in creating a friendly investment environment where domestic and foreign businessmen and their families can work in a safe and comfortable atmosphere. School and hospital services have improved significantly. There are more choices for entertainment and cultural activities.
Such factors also helps increase the demand for real estate apartments, especially the luxury segment in the foreign community in Vietnam. However, many regulations and procedures still hinder the capital flow of foreigners owning real estates in the domestic market.
Accordingly, Decree No. 99/2015/ND-CP, detailing the mechanisms for implementing housing ownership rights of foreigners in Vietnam coming into effect in 2015 requires Ministry of Public Security and Ministry of Defense to specify areas to ensure security and national defense and notify provincial-level People’s Committees. “The above regulations show that the Government is looking forward it getting better”, according to the working group. “Now, the last job is to identify commercial housing projects that foreign individuals and organizations are not allowed to own houses and publish them online. This work will be carried out by the provincial-level departments of construction”.
Super-luxury real estates are attracting foreigners not only in Vietnam but also overseas.