Hundreds of thousands of Viet Kieu (overseas Vietnamese) return to Vietnam in January or February each year to celebrate Tet in their former homeland. Typically, that’s also a time for them to find and purchase houses in Vietnam. This year, however, reports Saigon tiep thi, it seems that the number of Viet Kieu who plan to buy houses here is rather modest.

Officially, only ten Viet Kieu bought houses here last year

According to the HCM City Committee for Overseas Vietnamese, a lot of Viet Kieu, especially Viet Kieu from the US and Western Europe, have come recently to ask about the procedures to purchase houses in Vietnam. However, the ‘open door policy’ on allowing Viet Kieu to purchase houses in Vietnam has not yet created a buying wave.

According to Tran Hoa Phuong, Deputy Chairman of the HCM City Committee for Overseas Vietnamese, since 2006, only about 140 Viet Kieu have purchased houses in Vietnam.  One hundred of these were in HCM City.

In 2009, only ten Viet Kieu are officially recorded as buying houses in Vietnam, mostly in HCM City. These numbers are clearly ‘modest’ relative to the more than four million Viet Kieu living abroad.

Pham Quang Hai, Head of the Real Estate Transaction Division from Vinaland Phu My Hung confirms that very few Viet Kieu used his company as a consultant on real estate purchases last year.

“Many people asked for information but they did not buy,” he said, adding that in previous years, many Viet Kieu purchased houses at the Phu My Hung project in South Saigon, including some who bought five or six houses as rental properties.

The director of a HCM City real estate company believes that the global economic crisis has reduced the incomes of Viet Kieu.  Therefore, they have less to spend on purchasing houses or making investments in Vietnam.

The director said problems in the policies relating to real estate trading have discouraged many potential buyers.

The case of Nguyen Hang My Hoa, now living at 224 My Kim 1 Street in Phu My Hung, typifies the complicated policies relating to Viet Kieu house purchases.

Hoa bought her villa in 2002, but in her nephew’s name. “The policy was so complicated, while I really wanted to have a house to live because I decided to return to Vietnam. I had no choice but to use my nephew’s name,” she said.

Finally, Hoa’s name was written down in the house purchase documents after she regained Vietnamese citizenship in 2003.  However, Hoa is still waiting for her house ownership certificate.

Though official statistics show that only a modest number of houses have been sold to Viet Kieu, the number of houses owned they own is in reality relatively big. Real estate brokerage offices in Phu My Hung say that almost all Viet Kieu buyers continue to purchase homes in the names of their relatives.

Still awaiting guidance

Chairman Ngo Duong Hoang Thao of Dai Dong Duong Consulting and Investment Company observes that a large number of Viet Kieu have assets of upwards of five hundred thousand to one million dollars.  For them, Vietnamese real estate is a favored investment.

“The profitability of real estate investments is really attractive. Further, if they buy houses in Vietnam, Viet Kieu will have houses to live in when they return here,” Thao explained

Thao notes that notwithstanding the expansion of the right to purchase houses in a law passed by the National Assembly last June, there are still some unclear provisions in the policies relating on Viet Kieu house ownership.

The current laws specifically allow virtually any Viet Kieu to purchase houses, but don’t mention purchasing land. “Can Viet Kieu purchase land and then build houses themselves, then? There is no guidance about this.”

Phuong, the HCM City official, points out that the Government has yet to issue concrete guidance to officials who implement the new policy on Viet Kieu house purchases, though the law went into force on July 1, 2009.

Typically, he said, Viet Kieu do not know which agencies they need to contact to obtain necessary documents to be able to purchase houses.

VietNamNe/SGTT

In 2009, the Government issued many polices and regulations to govern and instruct the development of low-cost housing projects under a country-wide program to offer affordable homes for the poor. However, the regulations have seemed to cause confusion to both management departments and local homebuyers as low-income earners, the proper beneficiaries of the policies, have found themselves unable to buy the condos. Meanwhile, those without real demand for inexpensive houses have easily reached the projects.

Deputy Construction Minister Nguyen Tran Nam says the concerns are understandable as low-income residents in Vietnam have a strong housing demand. Meanwhile, the low-cost housing market will certainly see supply and demand imbalance as the nation has started few projects, he says.

To cope with the problem, the ministry issued Circular 36 late last year under which homebuyers have to meet several regulations to benefit from low-cost housing policies. They have to obtain written confirmation from employers and local authorities regarding their level of income.

Speaking at a seminar reviewing 2009’s low-cost housing market in Hanoi last week, Nguyen Van Hung, former president of Hanoi University of Construction, suggested the Government offer specific polices and incentives to attract more investors to the segment. “The nation should not impose the profit ratio limit of 10% on enterprises,” Hung was quoted by Tuoi Tre newspaper.

In fact, the regulations have caused many challenges for investors of low-cost housing projects.

“Non-state enterprises must have a strong will for developing the projects as they have to overcome too many difficulties, from the profit limit of 10% to regulations of proper homebuyers and administrative procedures,” lawyer Nguyen Hoang was quoted by Thoi bao Kinh te Sai Gon.

The Government has offered preferential policies in taxes, land use fees, rentals and credits for homebuyers while investors suffer losses if their projects fail to attract customers. “Although the investors enjoy a certain number of incentives from the Government, they still have to cope with tough conditions of the market. As a result, no enterprises dare to be sure that they would sell all the condos of a project,” Hoang explains.

Hoang adds that the Government should provide insurance policies to reassure enterprises. For instance, if enterprises fail to sell the projects due to any objective reason, the Government should buy the condos from the investors. This is a way to encourage more enterprises to join the market, Hoang says.

On the other hand, homebuyers also suffer contradictions from the regulations. They are only allowed to sell or lease the condos out ten years after signing contracts with investors. Otherwise, they are required to sell or transfer the condos to the State or the investors.

“Although low-income homebuyers can receive preferential policies, the regulations seem to prevent them to use their own properties as they wish,” Hoang notes.

Last year saw a large number of low-cost housing projects under this program expanded and social awareness has been raised on the accommodation needs of low-income residents. However, the Government needs to support enterprises and sustain development for the property segment, Nam says.

The Mekong Delta province of Tien Giang is capturing strong attention from investors, local and foreign alike, with trillions of Vietnam dong pledged by investors at a conference there on Friday.The provincial government awarded licenses to nine projects worth VND3.2 trillion, or nearly US$180 million, and signed 15 other memorandums of understanding with investors, who pledged to pour VND10.8 trillion more. The results were announced at the first-ever investment promotion conference in Tien Giang, some 50km southwest of HCMC, which drew the participation of senior leaders and nearly 1,000 entrepreneurs.

Among the new investors are HCMC-based Khang Thong Construction, Trading, Service Joint Stock Company, which will spend VND1.1 trillion developing Binh Dong Industrial Park in the province, and Dai Ngan Co., Ltd., which will build a new urban center worth more than VND740 billion.

Hong Kong-based Golden Resources Development International Ltd. obtained an investment certificate for a tap water distribution project worth VND368 billion for the eastern part of Tien Giang Province. This company has invested in several projects in the country and Tien Giang Province over the past 20 years.

Tran The Ngoc, chairman of the province, noted that the development of industrial park infrastructure, new urban centers, tourism, ports, services and manufacturing are areas of great potential in the province.

At the conference, graced by State President Nguyen Minh Triet and Deputy Prime Minister Hoang Trung Hai, investors also showed their keen interest in these sectors, as manifested in memorandums signed at the event.

The would-be investor Hoang Quan Mekong, for example, has plans to develop infrastructure of Tan Phuoc II industrial park worth VND1.2 trillion, while Tien Giang Industrial Park Infrastructure Development Joint Stock Co. has plans to pour VND1.5 trillion to develop infrastructure of some other IPs in eastern Tien Giang Province.

There were also four memorandums in the housing development sector, with Tien Giang Construction and Investment Joint Stock Co. alone pledging to develop Tan Phuoc villa project worth 1.05 trillion.

President Nguyen Minh Triet in addressing the event called on the province to provide an open business climate, and urged investors to tap advantages of the promising land.

Meanwhile, Deputy PM Hoang Trung Hai recommended the southern province to offer more incentives for investors in terms of land allocation, services and qualified labor force.

Tien Giang is becoming a hotspot for investors given the many infrastructure projects being developed that will highly benefit the province and thus investors.

The agriculture-based locality has the HCMC – Trung Luong highway project under construction. Once opened to traffic this Wednesday, the highway will shorten the distance between HCMC and the Mekong Delta province, thus reducing transport costs while boosting trade between the two localities.

It boasts a geographical and landscape diversity, with mountains, forests, hills, rice fields, salt fields, ponds, lakes, rivers, sea, islands and peninsulas.

The city has a coastline of 42 km and a rich marine biodiversity.

Its economic sectors are industries, trade, trade, seaport services, aquaculture, and tourism.

The city targets to become a centrally-administered city by 2020 and an industrial, trade and service center which plays an important role in the central key economic region.

The Silver Shores joint venture opened an international tourism centre in Da Nang’s Ngu Hanh Son (five marble mountains) district on January 26.

It consists of a five-star hotel chain and an entertainment area, including the biggest international casino in Vietnam.

In addition, there are 52 upmarket villas and a 1,000-seat national conference building.

The entertainment area alone covers 15,000 sq.m, capable of providing baccarat, blackjack, Sic bo, Roulette, Caribbean Stud Poker and other games for hundreds of foreigners at the same time.

The whole project is estimated at US$160 million in total.

Vietinbank Ba Dinh Branch committed to fund $60 million dong to CapitaLand Hoang Thanh Ltd Co to develop the Mulberry Lane high class apartment

project in Mo Lao urban area, Ha Dong Dist, Hanoi.

The commitment was signed on January 29.

Mulberry Lane project has total area of 2.4 hectares, comprising 1,500 high class apartments.

Ben Thanh Real Estate Investment Joint Stock Co (Ben Thanh Land) and Grand Capital Investment Fund are jointly introducing five-star apartments in HCM City these days.

The five-star Saigon Luxury Apartment is part of Ben Thanh Times Square project. The 22 story building includes 88 apartments located at No 172-174 Ky Con in HCM City’s Dist 1.

Total area is 18,000 square metres with two basements for parking and other facilities such as trade centre, mini supermarkets, café, and office for lease, swimming pool, spa and restaurants.

The Housing and Urban Development Corp (HUD) officially started construction project of Phu My new urban area in Nghia Chanh Ward, Quang Ngai City, Quang Ngai province on January 30, 2010.

The new urban area will be built on an area of 170 hectares, including Green Park, lake, apartment buildings, and villas. In addition, in the new urban area, there will be a resettlement area, social houses, and apartments for low-income residents with the total floor area of 1.2 million square metres.

The project’s total investment capital is calculated at 1.25 trillion dong. The construction of this new urban area is expected to last until 2013.

PetroVietnam Fertiliser Chemicals Corp (PVFCCo), PetroVietnam Finance Joint Stock Corp (PVFC) and PetroVietnam Oil Corp (PV Oil) started construction work on an official building in Q1, HCM City on January 30, 2010.

The project’s investor was PetroVietnam Fertiliser Chemicals Corp (PVFCCo), and PVFC as the main contractor. The new office building included three basements and 14 storeys with total construction area of 16,355 square metres, and campus area of about 1,750 square metres.

The total investment capital for this project was estimated at 758 billion dong, in which PVFCCo contributed 33 percent of the total, PVFC of 42 percent and PV Oil of 25 percent.

The new office building is expected to be opened and put into operation in the end of Q1 of 2011.

Six Senses Resorts and Spas has entered into an agreement with Ninh Van Bay Travel Real Estate Joint Stock Company for the management of two new luxury resorts in Vietnam.

Six Senses Latitude Saigon River, which is located in Dong Nai Province, is scheduled to commence operations by the second quarter of 2011 while Six Senses Latitude Phu Quoc, located in Kien Gang Province, is envisaged to open in 2012.

Currently, Six Senses manages the Six Senses Hideaway Ninh Van Bay in Nha Trang, which is owned by Ninh Van Bay. (hvs.com)