Vietnam needs to simplify property laws for foreigners

Vietnam's real estate market needs to solve many difficulties to increase the number of foreigners buying property and keep their continuous interest. In Vietnam, since the law allowing for foreigners to purchase property took effect in 2015, the number of enquiries and transactions from foreign buyers has increased significantly. Some positive changes that have taken place to the legal structure surrounding residential transaction activity will lure more foreign developers and investors into the local market.

Thanks to a safe and stable political situation and economic growth rate, foreign real estate investors are aware of Vietnam as a new market for investment. Foreign direct investment (FDI) is increasing, contributing to surge in number of foreigners living and working in Vietnam. In the meantime, the supply and quality of products are continuing to increase, bringing more options for buyers, including those buying for investment purposes. Last year, there were 800 foreigners receiving title deeds in Vietnam.

In the near future, foreign buyers will continue to play a role in the market because they are able to buy properties at lower prices than in their home countries.

Vietnam has the enormous potential to promote foreigners’ trading of real-estate products but it must solve many difficulties for foreigners when they buy properties in Vietnam. Foreigners have often faced barriers to buy real estate in Vietnam, including the limitation of the law on the foreign ownership portion of each property project. For apartment projects, foreigners can only own up to 30% of the apartment volume, while for townhouse projects the portion is not to exceed 10% or 250 units.

Furthermore, Vietnam has many laws, decrees and circulars related to property trading and foreign buyers often do not know all of the country’s laws. Foreign buyers also have trouble with getting support with money transfers from banks. Moreover, many foreign customers receiving houses or apartments have had problems getting certificates of ownership. The issuance of title deeds continued to be a challenge for foreign buyers.

To increase the number of foreigners buying properties, Vietnam has to make some positive changes, including simplifications of property laws. Vietnam should increase the portion of property products available for foreigners in each project. Moreover, it is necessary to complete legal documents, circulars, procedures and support for foreigners in buying property products in Vietnam. The nation needs to complete the process of issuing certificates of ownership for properties belonging to foreigners while banks need to increase support for foreigners in transactions. Existing projects should develop professional customer care processes for foreigners. The state should have a handbook for buyers to provide guidance on all steps and the state agencies implementing those steps. That would make it easier for foreign buyers to navigate the property purchasing process.