Insiders say it may take time to fully evaluate the impacts of the new policy that allows foreigners to own a home here.
Ho Chi Minh City's property market experiences strong growth in
the last quarter of 2016. Photo by VnExpress/Nguyen Thanh Van
When
Vietnam opened up its housing market to foreigners in July 2015, many thought
there would be so many buyers rushing in to grab the villas and apartments
here.
But after a year and a half since ownership restrictions
were removed, it seems nothing like that has happened.
Troy Griffiths, deputy managing director of real estate
company Savills Vietnam, said that the relaxed rules make Vietnam as appealing
as Malaysia and Thailand, which have already taken similar initiative to drive
home sales to foreigners.
But the new
policy, he said, has not been doing much for the Vietnamese economy so far.
“It’s not been anywhere near as sensational as we all expected,” Griffiths toldVnExpress International.
He estimated that the number of sales has not reached
thousands yet. His company has reported less than a hundred sales, mostly in
high-end products, and smaller apartments to Taiwanese and Singaporeans.
There are around 80,000 foreigners working and living in
Vietnam. Before July 2015, each of them could only buy one apartment here,
under conditions that they were either married to Vietnamese nationals, held
managerial positions, or had contributed to the country.
Industry insiders believe that easing ownership
restrictions have at least created more interest in the local housing market.
But many often complain that regulations and paperwork in general are still
very complicated for foreign buyers.
Griffiths said that theoretically, there should be no
regulatory problem with the new policy.
He said it is not easy to say for sure why the policy has
not been a big success as expected. But he said the country might need more
time for the new rules to work out, pointing out the case of Malaysia, which
has implemented a similar law for more than 10 years and has only seen 3,000
foreign buyers a year at most.
Real estate was Vietnam’s best growing economic sector in2016 with 3,126 new companies in 2016, a staggering 84 percent annual increase.
But it also saw a nearly 70 percent rise in closures, only
after agriculture and healthcare.
“It’s an extremely competitive sector,” Griffiths said.
He said the competition will continue in 2017 with a lot of
supply coming on.
A report released by Savills Vietnam on Monday showed
strong growth in all asset classes in Ho Chi Minh City, the country’s most
crowded city, in the last quarter of 2016.
Tourism boom, new public transport projects, and the
current low rate of urban citizens will be key drivers for Vietnam’s property
market in 2017, it said.
More than 60,000 apartments are expected to enter the
market in 2017 and 2018, with a strong growth in the mid-end and affordable
segments, the report said.
Only 34 percent of Vietnamese are living in urban areas,
and according to Griffiths, there’s a lot of room for residential development.
An oversupply will be good for the competition, Griffiths
said, dismissing concerns of a bubble similar to the one that hit the market nearly
a decade ago. “The good developers will continue on and the poor ones will drop
away,” he said.
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Source: Bao Vnexpress
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