Impact of Overseas Vietnamese Remittances on Real Estate in Vietnam

The real estate market is expected to boom as the Land, Housing, and Real Estate Business Laws come into effect, opening the doors for overseas Vietnamese to purchase houses.

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High demand

According to statistics from the Ministry of Construction, there are about 4 million people who want to buy houses in Vietnam in the future, including foreigners and overseas Vietnamese.

Along with the strong flow of foreign direct investment (FDI), the number of foreigners coming to live and work long-term in Vietnam is also increasing every year. According to data from the General Statistics Office, the number of foreign workers in Vietnam in 2019 was 117,800…

According to the same data, the number of foreign workers licensed to work in Vietnam as of March 2022 is 100,000, nearly 10 times higher than in 2005.

The real estate market is attracting remittances.

According to the Vietnamese Business Association Abroad, there are currently 600,000-700,000 overseas Vietnamese who are entrepreneurs, intellectuals with high qualifications (accounting for 10-12% of the Vietnamese community abroad), many of whom want to return to their homeland to invest, do business, or live, so the demand for buying houses in Vietnam is very high.

Long-term business in Vietnam as well as the attractiveness of the real estate market in Vietnam will undoubtedly create a demand for home ownership and apartments. In addition, the choice of wealthy foreigners when the price of houses in some countries is too high or the tightening of immigration regulations in some countries… will also increase the demand for owning houses in Vietnam.

Wide open for home buying

The regulations of the Land Law, Housing and Real Estate Business have been passed to create a unified and coherent approach to ensure that Vietnamese people who settle abroad still retain Vietnamese citizenship have the right to use land and do business in real estate like citizens in the country.

The new Land Law stipulates that Vietnamese citizens who settle abroad are Vietnamese citizens with full rights related to land, not just rights to residential land like Vietnamese citizens in the country.

With the new regulation, overseas Vietnamese are allowed to invest in the construction of houses, construction works for sale, leasing, rent-buy and investment in technical infrastructure in real estate projects (for transfer, lease, lease of land use rights with technical infrastructure).

Regarding the Real Estate Business Law, which takes effect from January 1, 2025, with many new content, it welcomes Vietnamese overseas with a demand for real estate investment in Vietnam. Accordingly, Vietnamese people who settle abroad are Vietnamese citizens (Vietnamese nationality) with rights and obligations related to land like citizens in the country (meaning they can do business in real estate like citizens in the country).

As for people of Vietnamese origin who settle abroad but are not Vietnamese citizens (do not hold Vietnamese citizenship), they are only allowed to do business in real estate according to current laws.

These regulations are consistent with the Housing Law (amended) which guides that overseas Vietnamese people who are allowed to enter the country can own houses attached to land use rights according to land laws.

Therefore, the regulations of these 3 laws have been basically unified and coherent to ensure that overseas Vietnamese who still hold Vietnamese citizenship have the right to use the land and do business in Vietnam like citizens in the country.

According to statistics, about 25% of remittances will be invested in real estate. Many experts predict that the real estate business situation may be partially improved thanks to over $10 billion of remittances each year, with 2023 alone recording a historic level of $16 billion.

Ngoc Mai

SOURCEvietstock
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