OFF INTO THE WILD WET YONDER How does this...
Vietnam’s property market is set to take off once again. Beginning in July of this year, Vietnamese living abroad (Viet kieu) have been able to purchase homes with the same privileges as any local, and foreigners will be able to buy and hold residences for an extended 50 years after the initial 50-year lease (100 years in total).
In the draft decree, foreigners with a valid visa, foreign investment funds, banks, and Vietnamese branches/representative offices of overseas companies are eligible to buy as foreigner investors. The Viet kieu are able to buy restriction free.
In the past, foreigners could only purchase one type of apartment on a 50-year lease, and they were restricted from sub-leasing, trading, inheriting, or collateralizing the unit. This, and the sheer amount of red tape involved, dissuaded many in the past from bothering to burden themselves with the hassles of trying to buy. The new policy allows for all types of apartments, villas, and townhouses to be purchased and used typically as in most other countries.
There will be no cap set on the number of units a foreigner can buy, but the total number of units owned by all foreign buyers cannot exceed 30% of the units in one apartment building, or 250 landed property units in one ward.
The policy is welcomed by many real estate industry professionals in Vietnam, as it is expected to boost an ailing real estate market caught in a glut since the economic crisis that hit the West several years ago.
Obviously, this could potentially kick-start a bubble of epic proportions like it has in other countries like, for example, Thailand and Malaysia. To make matters worse, there will continue to be some restrictions on where foreigners can actually buy. Moreover, the cash that will be thrown at these areas will probably hit an absurd level fairly quickly pretty much killing any chance of a robust secondary market, which ultimately means it will wind up being a money trap.
It is rather provocative to imagine that the Chinese, Americans, and maybe even a few French will once again be invading Vietnam… just this time with cash rather than guns.
Ho Chi Minh is somewhere stroking his goatee in disbelief at the mere thought…