Developers pin hope on Viet Kieu to revive real estate market
By Thanh Phuong in HCMC
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| A bird's eye view of a luxury residential section in HCMC - Photo: Le Toan |
While the real estate market has fallen into stagnation with personal income tax imposed on property transfers, enterprises still pin high hopes on overseas Vietnamese, also known as Viet Kieu, as potential customers. Viet Kieu have enjoyed more chances to own houses in Vietnam since the Government passed Decree 78 on July 1 to revise the Law on Nationality. Nearly 200 overseas Vietnamese recently joined a seminar in HCMC to learn about legal matters on Viet Kieu house ownership. They showed a 
strong need to buy houses in their home country.
More Viet Kieu have bought houses since the National Assembly amended Article 126 of the Housing Law and Article 121 of the Land Law to expand the list of overseas Vietnamese allowed to buy houses in the country, says Hoang Xuan Hoan, head of the HCMC Public Notary Office No. 2. Although the law only took effect as recently as September 1, the office has certified papers for three Viet Kieu to own houses since then.
Hoan says this is a good sign, citing that only around 150 Viet Kieu have bought houses in Vietnam since the Government gave them permission in 2001, according to the Committee for Overseas Vietnamese Affairs.
Decree 78 also extends the registration date for Vietnamese citizenship of Viet Kieu to July 1, 2014. Meanwhile, Article 126 of the Housing Law only regulates them to reside in Vietnam for three months or more to own several houses at the same time.
This is a generous legal platform for Viet Kieu to buy houses in Vietnam and a good opportunity for enterprises to serve new customers, says Do Thi Loan, general secretary of the HCMC Real Estate Association (HoREA).
However, their house ownership is limited to private, family accommodations. Many people wonder if this is to limit the number of houses overseas Vietnamese can buy. “We have to wait for detailed regulations and implementation directions for the amendments and see how the Government will manage property usage of the overseas homebuyers,” says lawyer Truong Thi Hoa.
Since no such decree has been issued, many Viet Kieu hesitate to buy houses in their home country although the Housing Law is certainly now more liberal. They fear inconsistency among related departments during implementation of the law and obstacles in administrative procedures for nationality or residence time conformity.
An industry insider even says the new provisions will not have major impacts or revive the quiet real estate market.
However, property firms think differently. After nearly two years of low housing demand, enterprises have pushed up marketing in various segments. “There is no hope for a golden age like in 2007 but enterprises should be well-prepared for any opportunities. Housing demand of Viet Kieu will have the most potential,” says a broker.
Many still consider Viet Kieu a light ray for too many luxurious housing projects developed over the past time.
HoREA will send a delegation of member enterprises to the annual conference of the U.S. real estate association in California this month where a large number of Viet Kieu are living. They want to establish cooperative distribution channels with American realty firms such as West Gate Realty Group, GD Commercial and DN Commercial to introduce products to Viet Kieu. They will also explore real housing demands of overseas Vietnamese to set up a business strategy, Loan says.
However, the business situation is not as easy as before and enterprises have to provide suitable products. Elderly Viet Kieu with a desire to return home or well-to-do and middle-aged people are potential customers, Loan says.
Overseas Vietnamese of the second and third generations prefer short trips to Vietnam and investments in real assets in the U.S., so the enterprises should offer reasonable prices to meet homebuyers’ demands, she adds.
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