Overseas Vietnamese buy around 10,000 houses in Vietnam annually

The recent ratification of the Land Law, which allows Vietnamese nationals residing abroad to expand land ownership in Vietnam, brings great news for the Vietnamese diaspora wishing to own real estate in their home country. This is particularly significant as remittances reached over 16 billion USD in 2023, marking a substantial 32% increase from 2022.

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Easy opportunity for Overseas Vietnamese to own real estate

In the 2024 Land Law (effective from 1/1/2025) passed by the National Assembly, the new changes that have received much attention are the details expanding land use rights for Overseas Vietnamese.

Specifically, Clauses 3 and 6 of Article 4 of the 2024 Land Law on “Land Users” stipulate that land users are granted land, leased land, recognized land use rights; are using stable land, meeting the conditions for granting land use right certificates, ownership rights attached to land without being granted land use right certificates by the State. including: individuals in the country, Vietnamese residing abroad as Vietnamese citizens; Vietnamese people of Vietnamese origin residing abroad.

Commenting on these new updates, Mr. Troy Griffiths, Deputy Managing Director of Savills Vietnam, believes that this change will bring more investment opportunities for the group of Overseas Vietnamese real estate buyers.

“This change also creates great potential for the market thanks to direct investment capital from Overseas Vietnamese. In the past, Vietnamese people abroad who wanted to invest back in Vietnam had to go through relatives or relatives, which led to some unnecessary disputes. The new law will address this issue, creating more favorable conditions for investment and minimizing the risk of disputes between parties during the investment process,” Mr. Troy Griffiths said.

Going deeper into the profile of this buyer group, the expert said that Savills has had the opportunity to work with many Vietnamese people living abroad. One of the main points is that most of them are older. These may be people who have emigrated abroad, after many years of hard work, they have owned a certain amount of money and are considering reinvesting in Vietnam, even considering returning.

“It’s also worth noting that there are many Vietnamese people working abroad, not only Overseas Vietnamese but also those working abroad. This creates a huge potential source of investors,” Troy analyzed.

Mr. Troy Griffiths, Deputy Managing Director, Savills Vietnam.

According to the observation of the Deputy Managing Director of Savills, many Vietnamese people living abroad have worked and studied diligently, and now they have capital and also want to return to their homeland.

Overseas remittances over c. USD 190 billion

“Vietnamese people often value family values very much. This is a very beautiful tradition because it not only brings capital but also high-level professional skills that can be transferred to Vietnam. Therefore, this is a very welcome initiative of the Government, hoping to open up more sources of capital and intellect for the country. We are seeing this happening in many industries in Vietnam. I think the most typical example for this case is New Turing Institute and VinAi. Their team consists of over 20 or 30 PhDs who have returned to Vietnam and are currently using their knowledge and intellectual assets to help the country develop,” he added.

Statistics from the State Committee for Vietnamese Abroad show that the amount of remittances to Vietnam from 1993 (the first year for remittance statistics) to the end of 2022 reached over USD 190 billion, almost equivalent to the amount of disbursed FDI capital in the same period. The record remittance amount of USD 19 billion in 2022 alone has put Vietnam in the top 10 countries receiving the largest remittance from abroad.

“From the above figures, it can be seen that this is a very important source of capital for Vietnam. The question is how will it be used when it arrives in Vietnam? This is quite interesting because it fluctuates slightly depending on the exchange rate. Of course, if sent from the United States, a strong US dollar means more purchasing power in Vietnam. Most remittances come from Asian countries through migrant workers. A considerable amount of this money has flowed into real estate,” analyzed Troy.

The demand for remittances for real estate has been noted. According to a 2016 survey by the Central Institute for Economic Management, about 15-20% of that amount is invested directly in real estate. If calculated quickly, this figure alone can reach about 10,000 apartments per year.

From another perspective, the expert believes that this capital source has also shifted from direct investment in real estate to expanding business investment for small and medium-sized enterprises.

SOURCEcafef
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