In theory, freehold land does not exist in Vietnam. Land can only be leased, even by Vietnamese; though in reality many leases seem to be for indefinite terms. “Buying” land is technically a transfer of leasing rights. The creation of a perpetually renewable lease means that Vietnam now has one of the most open property markets in Asia.
Vietnam opens up to foreigners
On July 1, 2015, the Housing Law (Law on Housing No. 65/2014/QH13) became effective. It has had enormous significance.
First, foreigners who have been granted a Vietnamese visa, plus foreign investment funds, banks, Vietnamese branches and representative offices of overseas companies can now purchase residential property. Foreigners can now own all types of properties, including condominiums and landed property such as villas and townhouses. Properties owned by foreigners can be sub-leased, inherited and collateralized.
Second, overseas Vietnamese who have maintained their Vietnamese citizenship will be treated like locals and are permitted to own unlimited property in their own names. It is estimated that about 70% of the 4 million overseas Vietnamese around the world still maintain their original citizenship.
For foreign individuals the house ownership period is 30 years, but it can be extended. The new law also limits foreigners from owning more than 30% of a single apartment building, or more than 350 houses and apartments in a ward, a subdistrict-level administrative area. The Ho Chi Minh City Real Estate Association has objected to this, because of the concentration of foreigners in key districts.
The revised housing law has revitalized the property market and sent a broader message that Vietnam is open for business. “The government is looking at ensuring that Vietnam continues to be competitive, continues to be attractive to foreign investors, and to create an environment where business can thrive,” said David Lim of ZICO Law Viet Nam.
The high-end condo market is booming
In Ho Chi Minh City, prices of luxury condominium units soared by 17% to an average of US$5,518 per sq. m. in 2018 from a year earlier, according to CBRE. In HCMC’s city center, the price of a luxury apartment starts at US$5,000 per sq. m., according to Sunny Hoang of Savills.
At Felizen Vista, a four-tower luxury condominium development in HCMC’s District 2, condos are currently priced between US$232 and US$290 per square foot (sq. ft.), according to Bloomerg.This means that a 1,722 sq. ft. four-bedroom condo unit is offered from US$400,000 to US$500,000. Almost all of the units at Feliz en Vista were already sold by end-2018.
At The Grand Manhattan, a 39-storey development located in HCMC’s District 1, known as “Saigon’s Wall Street,” selling prices for New York City-inspired condominium units start at about US$557 per sq. ft.
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