Billions of dollars in remittances have poured into real estate
In the context that many real estate businesses are "thirsty for capital", the flow of remittances is expected to partly revive the situation and excite the market.
According to the newspaper InvestAccording to experts, the Land Law (amended) expanding land use rights for Vietnamese people residing abroad is a positive move. This is even more meaningful when remittance flows in 2023 reach more than 16 billion USD. The amount of remittances transferred to Ho Chi Minh City alone has reached nearly 9,5 billion USD.
“Vietnam's real estate industry has only developed in the past 20 years. Ranked among Asian countries, we are still quite behind. Currently, Vietnam is in the 'golden' period and needs to appreciate every opportunity to accelerate development. In particular, the amount of remittances is a particularly important resource and is not inferior to the amount of disbursed FDI capital," Mr. Nguyen The Diep, Vice Chairman of Hanoi Real Estate Club, shared.
Billions of dollars in remittances have poured into real estate. Illustration photo from the internet
In addition, Mr. Diep said that new policy mechanisms need to promote flexibility, openness and ventilation. With current regulations, many bottlenecks still exist, especially in legal issues.
Statistics from the State Committee for Overseas Vietnamese show that the amount of remittances to Vietnam from 1993 to the end of 2022 reached over 190 billion USD, nearly equal to the amount of FDI disbursed in the same period. The record remittance source of 19 billion USD in 2022 alone has put Vietnam in the group of 10 countries receiving the largest remittances from abroad.
In particular, the flow of remittances flowing to the real estate sector is not a small number. According to statistics from the Central Institute for Economic Management, about 15 - 20% of the money sent home from overseas Vietnamese is being invested directly in real estate. According to Savills, if converted to products, this amount of money is equivalent to the value of 10.000 apartments per year.
“In the past, overseas Vietnamese who wanted to invest back in Vietnam had to go through relatives or relatives, thus leading to some unnecessary disputes. The new Land Law will solve this problem, create more favorable conditions for investment and minimize the possibility of risks between parties during the investment process", Mr. Troy Griffiths, Deputy Managing Director of Savills Vietnam Nam, comment.
Analyzing more deeply about the portrait of overseas Vietnamese buyers, the expert said that most of them are older. These may be people who have migrated abroad for a long time, currently own a certain amount of assets and are considering investing in Vietnam. In addition, some other people buy real estate to settle in their hometown.
In addition, Mr. Troy Griffiths said that the fact that overseas Vietnamese are "open" to buying houses and land in the country will be a driving force to attract many talented people to return to Vietnam to contribute. At that time, the market will not only receive more capital flows, but also benefit from high-quality human resources, helping the country develop more and more.
According to Financial Times, Mr. Nguyen Trong Toan - Manager of Investment Department, Savills Hanoi commented: "Vietnam shows stability not only in the political situation but also in the macro context, where the economy is recovering strongly." After the pandemic, with inflation remaining low and the exchange rate controlled by the State being more stable in relation to other countries in the region. Therefore, in the real estate sector, Vietnam still remains a notable investment destination for foreign investors and real estate developers in locations and segments with good development potential. ”.
Mr. Toan commented that each real estate segment of the Vietnamese market in 2024 will have its own investment highlights that attract foreign investors.
There are still concerns
According to Workers, information from Mr. Le Hoang Chau, Chairman of the Real Estate Association (HoREA), not only the Land Law (amended) but also the Law on Real Estate Business (amended), the Housing Law (amended) passed by the National Assembly at the end When it comes into effect in 2023, it will create equality between domestic individuals and Vietnamese residing abroad in real estate investment and business. From there, it helps attract remittances to invest in the Vietnamese real estate market.
Information from the Ministry of Construction shows that currently about 4 million people, including foreigners and overseas Vietnamese, want to buy houses in Vietnam. In addition, foreign direct investment (FDI) is pouring heavily into Vietnam, which will attract foreigners to live and work long term. That is an opportunity for real estate investors to develop every year.
Although recognizing that the new laws have many positive points in attracting investment and opportunities to increase liquidity in the real estate market, a real estate business leader said: "Until now, despite being aware of Buying houses by foreign customers will increase sales opportunities for businesses, but because of difficulties in buying and selling procedures and limitations in applying for certificates of land use rights, house ownership and other assets attached to land for this customer group, so the business has difficulty collecting the remaining 5% of the contract value. Therefore, real estate businesses mainly focus on selling to Vietnamese customers whose housing demand is still high."
Mr. Le Hoang Chau also said that in addition to the new and positive points, the current law still has some problems such as the issue of issuing pink books to foreigners, including overseas Vietnamese who have bought apartments in Vietnam. Mr. Chau cited statistics from 17 real estate businesses that by 2020, there were 14.000 foreigners buying apartments in Vietnam without being issued their own pink books. Of these, there are 11.000 units in Ho Chi Minh City.
In addition, there is another obstacle related to foreigners: the Law on Real Estate Business (amended) still does not allow foreigners to own land use rights because it is related to regulations on housing attached to residential land and apartments. Apartment buildings have an expiry date…
Dao Vu (Th)
