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Law to give foreigners right to purchase homes

Update: November, 22/2014 - 09:46

HA NOI (VNS)— The lifting of restrictions on foreigners from owning property in Viet Nam will benefit the country, experts said.

The amended Housing Law, which is scheduled to be approved by the National Assembly next week, has drawn the attention of the property market, as it will decide whether foreign individuals and organisations that are allowed to stay and operate in Viet Nam can own property.

If approved, it will be a breakthrough for the market and lead to a strong real estate demand. In addition, it will not only bring opportunities for the realty sector, but also increase the inflow of foreign money into the country.

Economist Le Ba Chi Nhan was quoted as saying by Lao Dong (Labour) Newspaper that the cash inflow into the property sector had been frozen for four to five years.

The new policy will open up the stagnant market, reducing the inventory and bringing relief to foreign investors, and thus improving the investment environment in Viet Nam.

Allowing foreigners to own homes in Viet Nam will be in keeping with the trend of international integration, Nhan added.

However, he noted that the new policy should have some strict conditions, so that the opportunities of Vietnamese people from low and middle-income families to buy homes are not affected.

That is also the reason why the amended law should stipulate that foreign individuals and organisations can buy high-end apartments in property projects, preventing direct competition with Vietnamese home buyers from low and middle-income segments as well as accumulation of real estate projects.

The analysis is based on the country's real estate situation.

Statistics from the Ministry of Construction showed that as of August 20, the country had property inventory worth VND82.3 trillion (US$3.9 billion), of which the apartment inventory numbered 17,000, worth VND26 trillion ($1.23 billion). The high inventory comprised high-end projects and large square apartments.

Dang Hung Vo, former deputy minister of national resources and environment, agreed, saying that in the context of the high-end apartment inventory, the proposed new policy will be an effective solution to solve the difficulties of the segment.

Construction Minister Trinh Dinh Dung said that the proposed policy change will meet several targets, including that of economic development and the resolution of social issues.

This can be considered as an investment channel, Dung added.

Figures from the ministry's Department for Housing Management and Real Estate market revealed that the property market is important, as it holds 40 per cent of the country's total assets. Activities related to real estate such as finance, credit and construction, besides building materials and labourers, account for 30 per cent of the economy.

In developed countries, a dollar's investment in the property and related sectors will have an increasing value of $1.5 to $2. In Viet Nam, the realty market value accounts for 5.4 per cent of the GDP.

Experts also agreed that the policy change will bring foreign cash inflow, create jobs and contribute to growth. — VNS


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