Foreign investors have recently poured more money into housing projects, instead of tourism estates, in Vietnam and they have had more confidence in the property market as well at a time when the revised real estate law is about to take effect.
According to the Foreign Investment Agency under the Ministry of Planning and Investment, foreign investment in real estate in the first quarter of this year reached nearly US$203 million, most of which was earmarked for housing projects.
Funding for real estate accounted for 11 percent of the total investment in Vietnam and ranks second after the manufacturing and processing field.
Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, said that many foreign investors now prefer housing projects to tourism properties.
It is predicted that the real estate industry in Vietnam will become more attractive to foreign investors this year when the modified law on real estate comes into effect in July.
One of the changes to the law is that investors will be allowed to sell or transfer their projects after they are granted the land use rights certificate.
Now, investors are required to finish building infrastructure before such sale or transfer.
“It becomes safer for foreign investors when they invest in a real estate project that has legal land use rights certificates,” Chau said.
Transparency and safety have lured more foreign investors to the field, he added.
Hamon Developments Corporation from the UK is light-footed in expanding their real estate portfolio in Vietnam by entering into a partnership with Son Kim Land, a local company, to invest in the $100 million Gateway apartment project in District 2, Ho Chi Minh City.
Gateway will have four towers with 546 high-class apartments, located on an area of 1.1 hectares, upon completion.
It is the third project of Hamon Developments in Vietnam, after the Nguyen Du Park Villas in Ho Chi Minh City and the Hanoi Business Center in Hanoi.
Two Japanese real estate companies Hankyu Realty and Nishi Nippon Railroad have joined hands with Nam Long, another local firm, to buy the Flora Anh Dao apartment project in District 9, Ho Chi Minh City.
The VND500 billion ($23.3 million) development includes 500 medium-class apartments, each covering an area of 54-67 square meters.