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Expats buying homes in Vietnam despite legal issues
| Published: | 20 Jun at 6 PM |
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After decades of semi-closure, Vietnam is opening up to expats and allowing house purchase under certain circumstances.
For years, Vietnam’s real estate market has been considered risky for investors and expats due to legal restrictions on long-term stays and house purchases. Recently, it seems that strengthening demand from South Korean and Japanese buyers has resulted in an easing of restrictions for property investment in Vietnam.
As the country attracts more expat businesses and expat workers, condo blocks in Hoh Chi Minh city’s District 9 are being snapped up by South Korean citizens keen to establish residency in the city where they’re working. Although problems still exist as regards Vietnam’s legal framework for expat property purchases, most prospective home owners seem happy to take the chance.
According to a local real estate company, it’s not just the South Koreans who’re moving in. In addition, Japanese and Western investors are following the South Korean trend of opening factories and other businesses in Vietnam’s Export Processing Zones. A number of foreign companies have leased luxury apartments suited to managerial-level employees, as well as buying to sub-let to expat workers.
Around 90,000 expats are already living and working in Vietnam, with half that number based in Hoh Chi Minh City. From July last year to March 2016, a total of 700 foreign residents bought high-end properties in the city, encouraged by the 2014 change in the country’s strict housing law. During the previous five years, foreign property purchase was only allowed on a trial basis, resulting in renting being seen as more secure and discouraging property investment by incoming foreign companies.
Since 2015, prices of apartments in Hoh Chi Minh City have increased by up to 15 per cent, dependent on the district, spurred on by foreign companies setting up premises in the city. International real estate company Savills reports that prices are continuing to rise, helped along by some $1.3 billion of direct investment from overseas. Given the instability and lack of infrastructure in neighbouring South East Asian countries, the foreign business investment boom in Vietnam looks set to continue.
For years, Vietnam’s real estate market has been considered risky for investors and expats due to legal restrictions on long-term stays and house purchases. Recently, it seems that strengthening demand from South Korean and Japanese buyers has resulted in an easing of restrictions for property investment in Vietnam.
As the country attracts more expat businesses and expat workers, condo blocks in Hoh Chi Minh city’s District 9 are being snapped up by South Korean citizens keen to establish residency in the city where they’re working. Although problems still exist as regards Vietnam’s legal framework for expat property purchases, most prospective home owners seem happy to take the chance.
According to a local real estate company, it’s not just the South Koreans who’re moving in. In addition, Japanese and Western investors are following the South Korean trend of opening factories and other businesses in Vietnam’s Export Processing Zones. A number of foreign companies have leased luxury apartments suited to managerial-level employees, as well as buying to sub-let to expat workers.
Around 90,000 expats are already living and working in Vietnam, with half that number based in Hoh Chi Minh City. From July last year to March 2016, a total of 700 foreign residents bought high-end properties in the city, encouraged by the 2014 change in the country’s strict housing law. During the previous five years, foreign property purchase was only allowed on a trial basis, resulting in renting being seen as more secure and discouraging property investment by incoming foreign companies.
Since 2015, prices of apartments in Hoh Chi Minh City have increased by up to 15 per cent, dependent on the district, spurred on by foreign companies setting up premises in the city. International real estate company Savills reports that prices are continuing to rise, helped along by some $1.3 billion of direct investment from overseas. Given the instability and lack of infrastructure in neighbouring South East Asian countries, the foreign business investment boom in Vietnam looks set to continue.
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