Things You Should To Know About Housing In Vietnam

With a developed economy and society, Vietnam has become one of the most attractive countries for foreigners to live and work.

Therefore, this article will analyze aspects of housing in Vietnam, from housing market, type of rental housing, housing prices, to housing ownership laws for foreigners in Vietnam.

OVERVIEW HOUSING IN VIETNAM

I. Vietnam Housing Market

In Vietnam, residential real estate is anticipated to grow at a CAGR of over 15% throughout the projection period.

In most regions and cities across Vietnam, the influence of COVID-19 and other factors slowed down the activity of the real estate market. In the country, the scenario of few projects receiving approval and a lack of supplies is now quite typical. As a result of the social isolation caused by the epidemic in the first half of 2020, projects were put on hold and the real estate trade was briefly shut down.

The population of Vietnam was 97.33 million in 2020, and it is projected to grow to 120 million by 2050. Rapid demographic and socioeconomic transformation in the nation is expected to boost the residential real estate market's effective demand in the upcoming years.

Among the economies of Southeast Asia, Vietnam is expanding with enormous potential across a variety of industries, including construction and real estate, and is anticipated to keep achieving exceptional growth in the years to come. The forecast for the residential real estate market in Vietnam is favorable, mostly as a result of the country's robust economic growth, growing urbanization, and the development of several megaprojects in important cities like Ho Chi Minh and Hanoi.

The middle-class young population in Vietnam has more discretionary income and more access to the internet, which has increased demand for and sales of residential real estate through online channels. Due to the rapid growth in personal wealth, more Vietnamese people can now buy homes, which has led to an increase in new construction and an increase in home prices. Due to the increasing demand for housing in major metropolitan areas brought about by urbanization, the residential market's focus has now changed from the high-end to the mid-value sectors. With a developing economy and rules that have made it simpler for foreigners to buy property, the nation is now regarded as a hotspot for the luxury real estate market.

Market trends

Government policies for the development of social housing are expanding.

In order to serve disadvantaged and low-income individuals in both urban and rural regions, the national assembly and the government of Vietnam promoted several policies and methods to create social housing. The 2014 Housing Law and other official instructions to promote and encourage the construction and administration of social housing, including allowing foreigners to invest in social housing development, are among the main measures of the Vietnamese government.

In order to improve the sources of clean land in urban and suburban regions, HCMC council undertook initiatives and first relocated 200 hectares of land from the inner city to the suburbs in 2008. The distance of social housing from the core area is anticipated to grow as clean land becomes more widely available.

Launched in 2018 with non-refundable assistance from the Korean International Cooperation Agency (KOICA), the Establishment of the 2021–2030 Comprehensive Social Housing Policy in Vietnam project aims to complete the regulatory framework for the affordable housing segment, which is in high demand in the lower–middle income nation.

According to the Ministry of Construction, around 250 affordable housing projects totaling 5.4 million square meters have been finished, providing 104,000 units for low-income individuals in metropolitan areas and employees in industrial parks.

Competitive Landscape

Due to the presence of several domestic and international firms, the Vietnamese residential real estate market is fragmented. Purely Vietnamese capital-based local businesses, foreign investment funds that are international businesses, and joint venture corporations are all examples of the residential real estate market in Vietnam.

By offering efficient solutions to better the property purchasing, selling, renting, and living experiences in Vietnam, a number of proptech startups and established real estate companies want to use technology to improve their operations and competitive advantage.

The Dat Xanh Group, FLC Group, Hung Thinh Real Estate Business Investment Corporation, and Nam Long Investment Corporation are important participants in the residential real estate industry.

II. Types of house for rent in Vietnam

• 1. Apartment

- Apartment

This is a kind of rental home in Vietnam where the owner rents out an entire flat or a single room. Due to the fact that the apartment room for rent is often the one with the most furnishings and the largest living area, this kind is frequently sought after by adults with high wages.

As long as the apartment is secure, you won't need to worry about your safety here. Furthermore, the living area frequently meets better standards than comparable models. The kitchen, bedroom, and living room of an apartment are often built independently.

These amenities have a high cost to go along with them. The primary deterrent for many of you from using this paradigm is this. Tenants will also be responsible for paying any additional rent-related expenses, including parking fees and management fees, in addition to the high rent. You'll also need to maintain the room's furnishings in its entirety. The renters are in charge of paying for any losses and damages.

- Mini apartment

Mini apartments typically range in size from 24 to 40 square meters. In a tiny apartment, all the amenities of an apartment, including the kitchen, bedroom, and workplace, are crammed into a single space with a suitable and compact design. Many renters in Vietnam are in favor of these types of rental homes. This is a good example for renters who need to choose an apartment but don't have a lot of money.

• 2. Shared hostel

A style of motel room in which both the landlord and the renter share a common entrance and living space. You will be living in a highly orderly atmosphere with rules about hours and living styles because the same owner is the landlord. In addition, some landlords also serve meals to their tenants. Since the renters are frequently carefully chosen, you won't need to worry about many things like theft or security.

However, there are a lot of drawbacks to this kind of Vietnamese rental housing as well. Living with the landlord comes with a number of drawbacks, including a curfew and a set closing time.

• 3. Homestays or Serviced Apartment

A serviced apartment and a dorm are combined in a kind of lodging known as homestay. To make the most of the available living space, this plan makes use of bunk beds and communal living areas. The most prevalent model currently is this one, which is preferred by both landlords and tenants.

The renters would have full access to all amenities, including kitchens, air conditioning, refrigerators, and housekeeping services. but only for a pittance of 1–2 million each month.

• 4. Villa

When referring to the wealthy country residences of the ancient Romans, a villa was originally used. Today, a stunning, tasteful, high class rural residence is referred to as a villa. The word "villa" may be used to describe affluent dwellings, and homes that fit the definition are often bigger residences with manicured gardens and sometimes a view of the sea or the countryside.

Villa is a special accommodation service model located in the high-end segment, which is receiving the attention of many domestic and foreign hotel investors. In Vietnam, this model has been gradually asserting a strong attraction with an increasing number of customers with increasing demand. Notable projects can be mentioned as: Ocean Villa Binh Chau,  Aqua City, etc.

Related article: Types of Apartment and Villa For Rent

Related article: What is the meaning of villa

• 5. Bungalow

Bungalow is a small, one-story house that originated in India in the 17th century. Initially, a bungalow was a simple house built for sailors from England to stay. The name "bungalow" was originally called "bangla" - the original Indian word for "a small hut" for people to raise livestock. When India was a British colony in the 19th century, the British adapted their "bangla" huts to cater to their needs.

Today, Bungalows have become a popular choice of housing in North America and England, but are built with a larger area. The bungalow is improved with a modern style, built of bricks combined with plants, vines, etc. Surrounding the bungalow must have bushes, grass, garden plants, etc., creating a feeling of closeness to nature. The porch of the bungalow design is always wide open.

Currently, in Vietnam, we see Bungalow Houses in tourist areas and resorts. This type of house has a fairly simple design, connecting to the sea or green forest, creating a very peaceful and relaxing feeling.

To deeply comprehensive the characteristics of Bungalows, visit here: Bungalow Guide: Characteristics of Bungalow House

• 6. Duplex

Duplex is a type of double-storey housing, usually a duplex comes in the form of a two story house where a common wall separates the two areas, duplex apartments are usually located on the upper floors of a building, but not on the highest floors. 

Most Duplex houses are located in buildings with convenient locations such as city centers, resort apartments, and tourism. Duplex houses are now very popular in apartment buildings and high-class apartments in Vietnam, especially in areas with high living standards such as District 2, District 7, District 1. The view of the Duplex is usually a fabulous scene, bringing a sense of comfort and relaxation to the owner. A duplex can then be extended to make three units or more, and then it would be termed as a “three-plex, four-plex, five-plex” and so on.

Related article: What is a duplex and how is it useful to residents?

Related article: 8 Most Common Types of Houses in Vietnam

III. How much do houses cost in Vietnam?

The Vietnamese real estate market is now accessible to interested foreign retirees and expatriates due to the country's significantly cheaper cost of living than that of the United States, Canada, or European nations. 

Vietnamese prices for consumer products are around 47.48% less expensive than American prices.

In Vietnam, a typical house costs around $4,500. Although there are differences in monthly rent costs, the average is approximately $650 and frequently includes utilities.

1. Saigon Housing

Even if it doesn't appear like it, Ho Chi Minh City is not the capital of Vietnam. Ho Chi Minh Metropolis is not only the most populous city in Vietnam, but it's also one of the most developed technologically and business-friendly regions in all of East Asia.

You can find yourself gazing up in admiration at the numerous distinctive buildings, pagodas, retail centers, and opulent apartments here very fast. You could think that Ho Chi Minh City is just for the wealthy and powerful based on its appearance.

However, some of Vietnam's most cheap homes may be found in this sprawling urban environment. In addition, some of the most costly residences and shops are located there. This paradox might be a little perplexing, but it's important to remember that many of Ho Chi Minh City's priciest neighborhoods are adjacent to popular tourist destinations, official government facilities, and business districts.

Finding well-located, modern, fully furnished apartments for less than $1,000 (USD) is not difficult here. Actually, fully furnished flats are the norm here, which helps to reduce high moving expenses. For as low as $700 a month, you can rent a modernized, one-bedroom apartment that is already furnished and frequently includes utilities fees.

Although more opulent and large houses typically sell for over $500,000, a permanent home or apartment in Ho Chi Minh City may cost you roughly $200,000. Ho Chi Minh City is a preferred choice for seniors and expats since these prices are exceptionally low when compared to those for comparable residences in other sizable metropolitan cities.

2. Hanoi Housing

Hanoi, the capital of Vietnam, receives its vegetables, seafood, and commercial goods from a number of significant coastal port cities and villages, ensuring their consistency in freshness and availability.

Prices are, however, often a little bit more in Hanoi than in more rural locations because it is the capital. An elegant, well-equipped apartment in the center of Hanoi can be found for approximately $900, which is a bargain when compared to the cost of living in other major cities across the globe.

Additionally, utilities might run you roughly $75 per month, and typical Hanoi apartments cost between $300 and $500 per month. You'll probably pay between $3,000 and $3,000,000 to own a property here. Naturally, the most expensive homes are big, contemporary, and close to important government structures.

For an average of $75,000, you may get opulent studios and one-bedroom residences. Despite the fact that Hanoi's outskirts provide some really affordable alternatives, these rates make the city one of the most costly places for potential homeowners. Hanoi is a city of contrasts, much like Ho Chi Minh City.

It boasts some of the most expensive and least costly real estate in Vietnam. The capital city of Vietnam has a relatively cheap cost of living, making it possible for locals and tourists to pay for basic essentials.

HOUSING OWNERSHIP LAWS FOR FOREIGNERS IN VIETNAM

On November 25, 2014, the National Assembly of Vietnam passed the amended Housing Law, which allows foreign individuals and organizations to own houses in Vietnam. The law officially takes effect from July 1, 2015.

I. Who are allowed to buy houses in Vietnam

- Foreign organizations and individuals invest in the construction of houses under projects in Vietnam in accordance with the Housing Law and relevant laws.

- Foreign-invested enterprises, branches, representative offices of foreign enterprises, foreign investment funds and branches of foreign banks operating in Vietnam (called organizations).

- Foreign individuals are allowed to enter Vietnam.

II. Conditions to buy real estate in Vietnam

Foreign individuals who must meet the following conditions will be allowed to buy and own houses in Vietnam:

- Foreign individuals must be allowed to enter Vietnam and not entitled to diplomatic or consular privileges and immunities. (Clause 3, Article 160 of the Law on Housing 2014)

- Foreign individuals must have a valid passport affixed with a stamp of entry verification of the Vietnam Immigration Department. (Clause 1, Article 74 of Government Decree 99/2015)

- Foreign individuals must have full civil act capacity to conduct housing transactions in accordance with Vietnamese law, not required to have temporary registration or permanent registration at the place where the houses are located. to be transacted. (Point b, Clause 2, Article 119 of the Law on Housing 2014)

- Foreign individuals are only allowed to buy and own houses of no more than 30% of the number of apartments in an apartment building; In case of separate houses, including villas and adjacent houses, the area with the population equivalent to a ward-level administrative unit may buy no more than 250 houses. (Point a Clause 2, Article 161 of the 2014 Housing Law)

- In an area with a population equal to a ward-level administrative unit that has investment projects on construction of commercial houses, including separate houses for sale, foreign individuals may own a number of separate houses according to the following regulations. (Article 76 of Government Decree 99/2015)

III. Regulations to obey while owning houses in Vietnam

Foreign individuals and organizations living and operating in Vietnam, foreign individuals and organizations investing in the construction of houses under projects in Vietnam may own houses in Vietnam.

Foreign organizations and individuals investing in the construction of houses under projects in Vietnam have the same rights and obligations as those of domestic entities. However, foreign organizations and other foreign individuals still have certain limitations.

- In case there is only one project with a number of separate houses of less than 2,500 houses, foreign organizations and individuals may own no more than 10% of the total number of houses in that project;

- In case there is only one project with the number of separate houses equivalent to 2,500 houses, foreign organizations and individuals may own no more than 250 apartments;

- In case there are two or more projects where the total number of separate houses in these projects is less than or equal to 2,500 units, foreign organizations and individuals may own no more than 10% of the dwelling houses of each project.

- Foreign individuals are allowed to own houses as agreed upon in purchase and sale contract transactions but for a maximum of not more than 50 years from the date of being granted the certificate and can be extended if needed.

- In case a foreign individual married to a Vietnamese citizen or a Vietnamese citizen residing overseas, he/she is entitled to own stable and long-term housing and the rights of the owner like a Vietnamese citizen. (Point c, Clause 2, Article 161 of the Housing Law)

Foreign individuals may lease houses for purposes not prohibited by law and must pay taxes according to law provisions; foreign organizations are only allowed to use houses for employees working at such organizations, not for other purposes;

The payment for the purchase, lease-purchase of houses must be via a credit institution operating in Vietnam;

Foreign individuals marrying Vietnamese citizens have the same rights and obligations as Vietnamese citizens;

Before the expiration of the house ownership, the owner may sell to another party; if past this time limit, the owners do not sell or give away, the houses shall belong to the State.

IV. Housing Law for foreigners

Foreigners can own houses in Vietnam through the following two groups of forms:

- Investing in housing construction under projects in Vietnam;

- Buy, rent purchase, receive as gifts, inherit commercial housing including apartments and separate houses in housing construction investment projects, except for areas of national defense and security according to regulations. Government regulations.

Note:

- The form of house purchase or lease means that the lessee pays in advance to the lessor 20% of the value of the house, except for cases where the lessee has the conditions to pay in advance, the payment shall not exceed 50%;

- The remaining amount to be paid shall be converted into monthly rent to the lessor for a definite period of time; after the expiry of the house-purchase-house lease expiry and when the remainder of the house rent has been paid, the lessee may own the house.

V. Requirements for foreigners to buy a house

Case 1: Conditions with the organization

Organizations must have an investment certificate or documents relating to their permission to operate in Vietnam, issued by a competent Vietnamese state agency at the time of signing the house purchase or lease-purchase contract. 

Case 2: Conditions with individuals

Foreign individuals must meet the following two conditions:

- Having a valid passport with a stamp of verification of entry of the Vietnam Immigration Department;

- Not eligible for diplomatic privileges and immunities.

- The above are subjects and conditions for foreigners to buy houses in Vietnam in 2019. Accordingly, foreigners can only buy houses in housing construction investment projects and must meet the conditions in each case.

VI. Administrative procedures, written contract for foreigners to buy a house in Vietnam based on The Housing Law 2014

Documents for foreigners to buy houses, apartments in Vietnam

What type of documents do foreigners need to show? According to the regulations to own houses, foreigners need to prove that they are subjects and conditions of house ownership prescribed in Government Decree 99/2015 including the following documents:

D1. Prepare all necessary documents proving eligibility to own houses in Vietnam.

Clause 1, Article 74 of the Decree provides for documents proving that they are the subjects and conditions for buying houses and houses of foreigners in Vietnam are:

"1. For foreign individuals, they must have valid passports affixed with stamps of the immigration control of the Vietnamese Immigration Department and not be entitled to diplomatic privileges and immunities according to regulations. of the Ordinance on privileges and immunities for diplomatic missions, consular offices and representative offices of international organizations in Vietnam.”

D2. Sign housing purchase contracts

Foreigners' house purchase and sale must sign housing purchase and sale contracts with contents and forms compliant with the provisions of Articles 121 Clause 1, Articles 122 Clause 1 and 123 of the Housing Law and notarized or authenticated.

Files components: 

The issuance of a certificate of land use transfer or a foreigner buying a transfer house must follow the procedures for applying for a certificate for the house owner in accordance with the provisions of the law of a foreigner buying a house in Vietnam:

- Make an application for a certificate of housing ownership under the form 04 / ĐK (Clause 23/2014 / TT-BTNMT)

- Documents proving that they are the subjects and conditions for buying houses and houses of foreigners in Vietnam

- A notarized or authenticated copy of the house transfer contract.

- Filing at the Office of the registration of land use rights, housing rights at the place where the house is located.

- Normally, after the completion of the handover and finalization of the sales contract (about 30 days), the investor will send a notice requesting the customer to apply for a red book in accordance with the law.

If the valid dossier receives and guides the fulfillment of financial obligations

If the dossier is invalid and complete, after 3 days of receiving the dossier, the competent agency shall notify the refund and guide the completion theory according to regulations.

D3. Procedures for granting ownership certificate. Pursuant to Clause 2, Article 9 of the Law on Housing 2014, the procedures for granting Certificates to house owners comply with the law on land.

D4. Fulfill financial obligations

D5. Receive the certificate

The time limit for investors to carry out procedures for making red books for customers is usually 50 days from the date customers submit dossiers according to notices. The time limit for issuing a red book will depend on the State agency (about 3-6 months from the date of filing).

VII. There are some cases that foreigners are not permitted to buy a house

Not all projects in Vietnam allow foreigners to buy, but there will be a list of specific housing investment projects in areas where foreign organizations and individuals are not allowed to own, published by the Department of Construction on the web portal. Basis: Point a Clause 1, Article 76 of Government Decree 99/2015.

In addition, Clause 2, Article 76 of this Decree further clarifies this issue: “Foreign organizations and individuals that are eligible to own houses in Vietnam may buy, lease-purchase houses of the project investors only. housing construction projects or purchase of houses of foreign organizations and individuals specified at Point b, Clause 4, Article 7 of this Decree and may inherit or donate only houses of households or individuals or receive donations of houses of organizations in the number of houses specified in Clauses 3 and 4 of this Article in housing investment projects permitted to own them; In cases where foreign organizations or individuals are donated or inherit houses in Vietnam but are not eligible to own houses in Vietnam, they shall be handled according to the provisions of Article 78 of this Decree. 

Related article: Property Law In Vietnam For Foreigners

In conclusion, the article analyzes all you need to know about housing in Vietnam. In addition, in this article, the sufficient legislative document will be discussed to clarify the Vietnamese official law in the real estate industry. In detail, crucial policies for foreigners related to property transactions aim to narrow down the knowledge gap and avoid making mistakes for both domestic and overseas parties.