Viet Nam’s government has expressed support for a new draft law that would give foreigners 99-year leaseholds on properties they buy in key investment areas.

Foreign men check out a real estate project in Viet Nam. Photo by VnExpress

The Ministry of Planning and Investmentrecently presented the bill to the cabinet, suggesting the leasehold duration for foreigners in special economic zones should be nearly doubled from the current 50 years.

Viet Nam has 18 special economic zones and is developing 3 more in Quang Ninh Province near the Chinese border, Khanh Hoa and Kien Giang provinces and Phu Quoc Island.

Prime Minister Nguyen Xuan Phuc said the bill had been carefully drafted but needed to stand out to draw more investment to the zones.

Industry insiders told VnExpress International that they are "excited" by the news.

“This is good news for the property market,” Neil MacGregor, managing director of property consultancy firm Savills in Viet Nam, said. But the market should await details, he said, including confirmation that foreigners would indeed receive a 99 year leasehold title and not just a lease from a developer.

The bill will be reviewed by the legislative National Assembly for approval this October.

Viet Nam opened up its housing market to outsiders in July 2015, allowing foreign investment funds, foreigners with valid visas, and international firms operating in Vietnam and overseas to buy unlimited residential properties with a leasehold of 50 years.

There are around 82,000 foreigners working and living in Viet Nam.  Before the amendments to the Housing Law, each of them were elegible to buy one apartment providing they were either married to Vietnamese nationals, held managerial positions or had contributed to the country.

Industry insiders believe that easing ownership restrictions has created more interest in the local housing market, but many people complain that regulations and paperwork are still very complicated for foreign buyers.

Meanwhile, many Vietnamese are pouring money into overseas properties, particularly in the USA, which PM Phuc says is a sign that Viet Nam’s investment environment needs to improve.

Vietnamese ranks ninth among foreign buyers of residential properties in the U.S., according to the 2017 Profile of International Activity in US Residential Real Estate issued by the US National Association of Realtors last month.

The report said Vietnamese people spent over $3 billion buying homes across the Pacific in the year ending March 2017.

(Source: VnExpress International)