25 May 2008
Martha Ann Overland writes from Hanoi:
Vietnam’s National Assembly has voted to allow foreigners to buy property but when it goes into effect next year there will be limits on who is affected and what they can buy.
The resolution passed May 22 limits ownership to foreigners who meet specific residence and professional criteria, according to the official Vietnam News Agency. And eligible buyers will be allowed to purchase only apartments, not houses or land.
Under the new rules, individuals who qualify include expatriates investing in the country, foreigners married to Vietnamese and those with university degrees working in specialized fields. A category was created for those who have been decorated by the president of Vietnam and named an honorary citizen.
When the law goes into effect, foreigners will be restricted to apartments in approved housing developments and after 50 years, apartments must be sold or given away. The properties must be occupied by the owners and cannot be used as investments.
While foreigners might find the restrictions less than attractive, the government hopes that it will signal that Vietnam is open for business. “This law, once it takes effect on Jan. 1, 2009, will further promote the development of the real estate market for foreigners in Vietnam,” said Ngo Duc Manh, vice chairman of the National Assembly’s External Committee. “It is a positive signal for foreigners working and living in Vietnam.”
According to the Ministry of Construction, 80,000 foreigners now live and work in Vietnam; about 20,000 of them would be eligible to buy under the new rules. Currently most expatriates prefer to live in villas and detached houses.
Despite the limitations, the change was welcomed by real estate developers who hope additional buyers will help buoy sales. Although apartment prices in urban areas had been rising, the market has softened in the past few months, with prices dropping 20 to 40 percent from their all-time highs.