Foreigners own 2 pct of Vietnam housing supply: report

From 2015 to 2020, 17 major real estate developers in Vietnam have sold 12,335 property units to foreigners, 81 percent of them in Ho Chi Minh City, according to a report by the Ho Chi Minh City Real Estate Association (HoREA).

Assuming these companies, which include popular names like Vingroup, Novaland and Phu My Hung, account for up to 80 percent of the total units sold to foreigners in Vietnam, about 14,000-16,000 units nationwide have been sold to foreigners in the last five years, or 2 percent of total housing supply, the report says.

This shows that there’s not been a foreign ownership wave in the Vietnam property market in the last five years. Furthermore, since foreigners mostly buy properties in the high-end segment, their demand has not created any major negative impact on low- and medium-income locals looking to buy their own homes, it adds.

Developers have been strictly following the 30 percent foreign ownership cap the government has set for each housing project, HoREA says, adding that this ratio should be maintained.

Vietnam currently allows foreigners to buy property, except land, but not more than 30 percent of a residential quarter or an apartment project, as long as the project is not located in areas deemed vital to national security.

The association also says in the report that most foreigners from Europe, North America, Australia and Japan prefer to rent when they come to work in Vietnam, while those from mainland China, South Korea, Taiwan, Hong Kong and Singapore prefer buying properties here.

The HoREA report and data comes amid recent debates over whether Vietnam should increase its 30 percent cap on foreign ownership in real estate projects.

Several industry insiders say that rising foreign direct investment in Vietnam is bound to increase demand for house ownership, and that many foreigners consider property in the country an investment.

Officials and lawmakers, however, have expressed concern over foreigners using Vietnamese proxies to exploit legal loopholes and gain ownership and control over large areas of land.

A report released in May by the Ministry of Defense says Chinese nationals and entities own more than 162,000 hectares of land in Vietnam via proxies, mostly in coastal areas, and operate hospitality, restaurant and tourism services on such land.