Over the past two years many investors in Vietnam property market have bought up swathes of land in HCMC, often at artificially inflated prices, in the hope that land ownership would be opened up to foreigners and that they could then sell on to non-nationals at huge profits.
However, while it is still possible that the law might be changed so that foreigners can own land on which to build houses at some time over the coming years, it seems somewhat unlikely to come about any time soon given the fact that the government has only just visited the issue of foreign ownership. It has stated that the law will indeed be relaxed, but that ownership will be limited to condominiums and only under certain conditions. It could still go either way but at present, there is no solid commitment to open up land or house ownership.
However, The momentum behind those convinced they will be able to buy and then sell expensive land and houses to foreigners has set off a rise in HCMC land plot prices, especially in key districts two, seven and Nha Be. In 2017, land plot prices surged up to VND1 million ($62.5) per sqm per day, according to Vietnamese newspaper Thanh Nien.The closest the government h as come to clarifying the situation was when deputy minister of construction said the drafted plan on selling houses to foreigners would be submitted by the Government to the National Assembly “in the coming time”. He pointed out however, that “houses such as villas shall not be sold to foreigners, due to issues relating to land ownership.”
However, their chances of getting a return on their outlay was boosted by one piece of government legislation – namely the Residence Law and Land Law that eliminated obstacles for people from other provinces seeking to migrate to Ho Chi Minh City and buy property.
Although a foreigner cannot own land in Vietnam for private ownership they can effectively buy into it through funding a property development, as many overseas firms have done. Foreigners can have ‘virtual ownership’ of properties, in that contracts can include a clause which states that if a change in law comes about permitting foreign ownership of properties in the future, a ‘right to long-term lease’ contract could be converted to a ‘right of ownership’ contract.