One year after foreigners were permitted to buy houses in Vietnam, many real estate projects have reached their foreign sales limit of 30 per cent.
Vietnam’s real estate projects have attracted a high number of foreign buyers
The new revised Law on Real Estate Business and Law on Residential Housing, effective from July 1, 2015, limit the total number of apartments in a certain condominium that can be owned by foreigners to 30 per cent, or 250 separate houses in a certain ward.
A representative from The Nassim confirmed that the project has reached the 30 per cent cap.
The Nassim is a luxury apartment project developed by Hongkong Land and Son Kim Land in Ho Chi Minh City. The four towers will add 238 units to the market in 2017.
The high rate of foreigners buying house in Vietnam has also been seen in other projects, such as Nam Phuc-Le Jardin, funded by Phu My Hung, and projects by CapitaLand and Keppel Land.
David Blackhall, managing director of VinaCapital, said that this cap specifically relates to condominium projects, and is considered fair, given that these laws are new.
“In time, they may increase this cap, like Thailand did, especially if local demand weakens over the medium term. However, my concern with this is that it may prove difficult to control and enforce when secondary sales (and then third and fourth-hand sales) occur. This is even a bigger issue with land sales,” he said.
Nguyen Duc Quynh, executive assistant manager of Furama Danang, believes that with the change in policies, the 30 per cent cap is suitable.
“I hope that the rate will be allowed to increase in the future. Meanwhile, we need to work more on policies to attract investors. For example, we are using a 50-year leasehold, and it would be more attractive if we could extend it to a 99-year leasehold, as in Singapore,” he said.
Dung Duong, director of research and a consultant from CBRE Vietnam, said that the foreign sales cut-off has been reached in many projects, especially those which are developed by prestigious companies and progressing well.