Resort properties, villas attract interest from overseas Vietnamese

With amendments to the Land Law set to make real estate purchases easier for overseas Vietnamese, remittances would become the new driving force for the property market, VARS said in a recent report.

When the amendments take effect in July overseas Vietnamese will get exactly the same rights as Vietnamese citizens, allowing them to buy properties directly, it pointed out.

According to VARS, these remittances tend to flow into illiquid segments with high value such as luxury villas in major urban areas and resort real estate.

These are favored by overseas Vietnamese because they make for ideal vacation homes, rental properties and retirement houses, it said.

More overseas Vietnamese are buying properties in Vietnam because housing prices are too high in developed countries, it added.

Research by the Central Institute for Economic Management has found that 15-20% of inward remittances are flowing into real estate.

If overseas Vietnamese have greater opportunity buy properties in Vietnam, there would be a significant boost to the real estate market, Troy Griffiths, deputy managing director at real estate consultancy Savills Vietnam, said.

Savills has collaborated with many overseas Vietnamese clients, and a majority of them are senior people with assets after years of working abroad and they want to invest in Vietnam or return to the country after retirement, he said.

This is a large potential investor base for the real estate market, he noted.

To fully capitalize on this demand, experts said developers should collaborate with overseas Vietnamese communities to learn more about them and improve designs and construction quality to meet their needs.

The government needs to provide tax incentives to overseas Vietnamese buying real estate in Vietnam, VARS said.

It must also establish a national database to make information more accessible to investors and have regulations to protect their rights, it added.

There are around six million ethnic Vietnamese living in over 130 countries and territories, 80% of them in developed nations, according to the State Committee for Overseas Vietnamese.

Last year the State Bank of Vietnam estimated that around $16 billion worth of remittances came into the country, up 32% from 2022.