Vietnamese Prime Minister Nguyen Tan Dung agreed Saturday on the proposal to allow foreigners to own apartments in Vietnam as a solution to assist the troubled real estate market.

The program, however, must be followed by tight management rules in order to ensure that no negative issues may occur, the PM told a government monthly meeting in Hanoi last weekend.

Vietnam has been piloting a five-year program permitting foreigners and overseas Vietnamese to buy apartments in the country since 2009. The trial is over this year and plans to continue the program have been proposed by some cabinet members.

As of February 2013, there were only 427 cases of foreigners buying apartments in Vietnam, according to the General Department of Land Management. Ho Chi Minh City saw the largest number of cases at 342.

The figure, however, remains modest, as there are some 80,000 expats living and working in the country, experts close to the matter commented.

The pilot program, implemented under Resolution No. 19 and guided by Decree No. 51 of the government, stipulated that foreigners are allowed to possess an apartment for a term of less than 50 years. However, foreigners are banned from leasing or trading their apartments.

Reviews needed

“As the pilot scheme is set to finish this year, if the government has accepted the proposal to continue the program, we need to review how it has been implemented over the last five years before determining the new policies,” said Phung Van Hung, a member of the National Assembly’s Economics Committee.

Another NA delegate, Cao Si Kiem, said an official policy to allow foreigners to buy apartments in Vietnam should soon be released.

Kiem, who is the ex-governor of the State Bank of Vietnam, asserted that it is a sound policy to greenlight apartment purchases for foreigners.

“This will have positive impacts on the realty market,” he said.

He pressed that it should be clarified why there are only a few foreigners who are actually able to buy apartments in Vietnam, while the real demand is much larger.

“We have an adequate supply of houses and apartments of all kinds, so does the root of the issue lie in the policies and management?” he asked.

Financial expert Bui Kien Thanh, meanwhile, said Vietnam should not be an exception, as most other nations have open policies allowing foreigners to buy apartments.

“Foreigners cannot bring their apartments with them when they leave Vietnam,” said Thanh, who has lived and worked overseas for many years.

So we should not worry over negative social effects. What’s important is to create conditions for [foreigners] to buy apartments,” he concluded.