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Foreign buyers show appetite for Vietnam’s property market: report

Foreign buyers show appetite for Vietnam’s property market: report
People drive past the new urban area Trung Hoa Nhan Chinh in Hanoi. Photo by Reuters

Interest from foreign investors, mainly from Japan, South Korea and Singapore, is boosting the growth outlook for Vietnam’s property market, according to the national real estate association.

The Vietnam Real Estate Association (VNREA) said in its new report that the number of property transactions last month soared 17 percent from the previous month.

Hanoi posted an 18-percent increase to more than 1,300 transactions in October. The figure in Ho Chi Minh City rose nearly 17 percent, to about 1,200.

According to the report, foreign buyers made up about 20 percent of the transactions in October.

The report attributed this trend to the government’s efforts to stabilize the local currency, control inflation and ease market access for foreigners.

Last year Vietnam relaxed restrictions on foreign ownership to lure foreign funds into the market, which had been saddled with oversupply since a real estate bubble burst in 2011.

The amended law, effective from July last year, allows foreign investment funds, foreigners with valid visas, international firms with operations in Vietnam and overseas Vietnamese to buy residential properties.

VNREA has forecast promising prospects for the local market, saying demand from foreign buyers will continue to drive growth.

The number of foreigners living in the country has reached 320,000, said the property association.

Investors with business interests in Vietnam from Singapore, South Korea, China and Japan are the most likely buyers, attracted by the potential for higher yields in Vietnam than at home, according to VNREA.

Industry insiders say local investors have also been flocking to the property market as a response to low returns on gold and bank savings.