Allowing foreigners to buy tourism property developments needs careful consideration

The Ministry of Construction recently proposed amending the laws on housing and real estate business, allowing foreign individuals and institutions to buy tourism property developments to aid the declining market. Photo reatimes.vn

The construction ministry recently proposed amending laws on housing and real estate business, allowing foreign individuals and institutions to buy tourism property developments to aid the declining market. The ministry also proposed foreigners should be allowed to buy more apartments in a building than the current cap of 30 per cent.

Under the Law on Housing, foreigners can only own apartments for residential purposes, according to the ministry’s Housing and Real Estate Market Development Department. The department said that recent years had seen increasing demand from foreigners to buy apartments for business purposes, such as tourism property.

According to Viet Nam Real Estate Association (VNREA), allowing foreigners to own non-residential apartments would help attract a significant sum of investment into the real estate market. Still, the association said it was necessary to manage by regulations conditions for foreigners to be eligible for buying non-residential houses in Viet Nam.

VNREA’s deputy general secretary Nguyen Van Dinh said allowing foreigners to own tourism property developments would promote the development of the real estate market, especially in the context that the tourism property market was hit hard by the COVID-19 pandemic.

The VNREA said that this would also be a long-term solution for Viet Nam to become a destination for vacation, retirement and investment into real estate from foreigners.

According to Su Ngoc Khuong, senior director of Savills Vietnam, selling houses to foreigners should be seen as a form of export to draw foreign investment into Viet Nam’s real estate market. Khuong added it was necessary to raise favourable conditions for foreigners to own houses to attract foreign investment inflow.

The inflow of foreign investment into tourism property market would push the real estate market development, improve liquidity as well as attract more tourists and accelerate the tourism industry, Khuong said. He added that it would also promote diversification of tourism property products and improvements in product quality.

The cap of 30 per cent, more or less, was not really important, he said. Khuong added that it was more important to regulate which property products foreigners were not allowed to own to ensure national defence and social security.

Huynh Tan Vinh, general director of Furama Resort in Da Nang City, said many countries allow foreigners to buy tourism property developments to attract investment into this segment, adding that there would be increasing interest from foreign investors in Viet Nam’s tourism property market if the proposal was approved.

Tran Xuan Tay, office chief of Khanh Hoa Province Department of Natural Resources and Environment, said opening doors for foreigners into the tourism property market was necessary but regulations on eligibility must be clarified. Tay also added that foreigners could be considered to own non-residential property for a certain amount of time, such as 50, 70 or even 90 years.

Nguyen Duc Lap, Director of the Da Nang Real Estate Research and Training Institute, said the Government should clarify areas and projects in which foreigners were allowed to buy apartments.

Detailed instructions about granting ownership certificates for foreigners should also be issued, experts said.