Expanding foreign home buyers is now very necessary to help foreigners enjoy a better life in Vietnam as well as help boost the domestic real estate market.

The Vietnam Law and Legal Forum magazine published by the Vietnam News Agency highlighted this issue in its issue No. 224 - April 2013.

Four years after Vietnam allowed foreigners to buy homes in the country, only 427 foreigners, including overseas Vietnamese, officially owned a Vietnamese home, according to statistics of the Land Administration under the Ministry of Natural Resources and Environment.

This figure was so modest compared with the number of foreign residents in the country which now reached some 80,000.

The policy to allow foreigners to buy homes in Vietnam was introduced in 2008 under National Assembly Resolution No.19 which allowed foreign organisations and individuals to buy and own homes in Vietnam starting from 2009.

But strict restrictions on foreign home buyers and their limited right to own and transfer property have discouraged foreigners from buying homes in Vietnam even though their housing demand was high, estimated at around 1 million square metres.

Under the resolution, foreigners eligible to buy houses include five groups: direct investors in Vietnam or holders of managerial posts hired by foreign businesses in Vietnam; persons who are awarded orders or medals by the President for their contributions to Vietnam, or as decided by the Prime Minister; holders of tertiary or higher degrees working in social and economic fields and specialists in fields which Vietnam has demand for; spouses of Vietnamese citizens; and foreign-invested enterprises not engaged in real estate business which buy houses for their employees.

To own a home in Vietnam, a foreigner must be allowed to reside in the country for at least one year and not be entitled to diplomatic immunities. He can own an apartment for maximum 50 years and use it only for residence without leasing or using it as an office or for other purposes.

Analysts said the Government should expand target beneficiaries and ease procedures for foreigners to own homes in Vietnam to warm up the sluggish real estate market which now have some 26,000 apartments left unsold in Hanoi and over 20,000 apartments in Ho Chi Minh City .

Foreigners buying homes in Vietnam will have positive impacts on the property market, making it reach market economy standards, said former State Bank governor Cao Si Kiem, stressing that it is now the time for the Government to legalise the home ownership of foreigners in Vietnam rather than to pilot it as currently.

The Government should allow foreigners to buy and own homes in Vietnam as a way to increase liquidity of the domestic property market, said Le Hoang Chau, president of the Ho Chi Minh City Real Estate Association.

Real estate inventories in the country’s two largest cities of Ho Chi Minh and Hanoi are mostly luxury and high-class apartments hardly affordable to Vietnamese, Chau said, seeing expansion of foreign home buyers as an option to boost sale.

To Nguyet Minh from a real estate consultancy firm agreed that foreigners’ home purchase will help trigger demand for the real estate market as it will break the market’s psychology to watch for lower prices. Once sales picked up, demand will probably rise as buyers might be afraid of loosing good chances to own property, Minh said.

Allowing foreigners to own homes is a practical policy to promote investment and economic development, creating conditions for foreigners to settle in Vietnam, Minh said.

Former Deputy Minister of Natural Resources and Environment Dang Hung Vo stressed this move will help not only warm up the market but also build confidence for foreign investors to make long-term investment in Vietnam.

Foreigners buying houses should be regarded as on-the-spot export, lawyer Tran Vu Hai said, recommending foreigners should be allowed to buy high-grade apartments (worth 100,000 USD or more) in unlimited number with simple procedures.

Analysts said the Government should consider allowing foreigners not only to own homes but also to sell or lease them, which was quite reasonable.

Vietnam should remove all barriers for foreigners to buy homes in the country, said Vietnam Construction Association Vice President Pham Sy Liem who saw no reason for keeping financially viable foreigners from acquiring housing products.

To encourage foreigners to buy houses, the Government needs to speed up the grant of home ownership right certificates, an investor from the Republic of Korea said, citing the time to obtain such a certificate might last two years which, in many cases, is longer than the stay of a foreigner in Vietnam.

The Ministry of Construction is considering expanding foreign home buyers and easing home purchase conditions, particularly for luxury apartments, a solution to rescue the real estate market, Minister of Construction Trinh Dinh Dung said, adding the ministry will make proposals to the Government for submission to the National Assembly this year.-VNA