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Complicated procedures hinder citizens from purchasing houses in foreign countries
In the post-crisis period, a lot of real estate firms in the UK and the US are now targeting Vietnamese buyers. However, due to complicated procedures, it is still difficult for Vietnamese citizens to buy houses in foreign countries.
Savills Vietnam, a real estate service provider, has recently offered to sell 155 high grade apartments in the UK to Vietnamese clients. In August, NAC Real Estate announced it is now the sole distributor in Vietnam for the Saigon Villas project in the US developed by Bridge Creek. Each of these apartment projects is being offered on sale for between $250,000-400,000.
Both Savills and NAC Real Estate are targeting three main groups of Vietnamese clients: Vietnamese individuals who want to buy houses in the US and UK to turn them into offices; students who study in these countries; and investors.
Dang Van Quang, a former senior executive of John Lang LaSalle Vietnam, said that after the global financial crisis, many real estate firms in the UK and the US are targeting Asian clients, including Vietnamese clients. It is now a growing trend in China to own houses in foreign countries, but this trend has not caught on in Vietnam yet.
Complicated legal procedures, not high prices, prevent Vietnamese citizens from purchasing houses.
Nguyen Thanh Huong, a woman in Hanoi, said she and her husband regularly have to go abroad on business, so she intends to buy an apartment in France or the UK. Real estate prices in France, according to Huong, have bottomed out since the end of 2009. A 50 square meter home located between the inner-city and the suburban area of Paris is now priced at three billion dong, while a villa is priced at seven billion dong.
However, after a great deal of effort, Huong still cannot purchase a house. “The biggest problem for us is to prove our financial standing and to explain the origins of the money that will be used to purchase the house. Up to ten documents are needed,” Huong said. “If your application for purchasing a house is rejected, you will have to wait three to five years to apply again.”
Huong once wanted to ask a real estate broker in Paris to take care of these purchases for her. However, because the service fee was so high, Huong gave up this desire. She has been told that she needs to go another route in order to purchase a house in France. If her daughter can gain French citizenship, everything will be much easier.
Thuy Quynh seems to be luckier than Huong, because Quynh’s daughter has obtained French citizenship after she earned both a bachelor’s and master’s degrees within five years. Quynh had to sell her land in Vietnam, then asked the banks in Vietnam to prove that this sum of money was “clean money”. After that, she sent the money to her daughter in France to purchase the house.
Quang Tung, now a student in the US, said he purchased a house in the US under his brother’s name, who resides in the US. “Most Vietnamese citizens who want to buy houses in foreign countries need to have relatives permanently residing in those countries,” he said.
Meanwhile, a representative from Savills Vietnam told local newspaper VnExpress that clients need to hire legal consultants in order to purchase a house in the UK.
Clients’ legal consultants will work with real estate developers’ legal consultants. The payment will be carried out through prestigious banks. All the steps must follow Vietnamese and British laws.
According to lawyer Pham Duc Giang from BMC Law Office, Vietnam’s laws still do not have concrete clauses stipulating what to do with remittances used so that Vietnamese people can purchase houses. The 2005 Foreign Exchange Ordinance and Decree 160 dated December 28, 2006 only mentions remittances abroad for other purposes (Overseas studies, healthcare, business, tourism, etc.).
Giang also said that remittances will also have to follow the laws of the foreign countries where Vietnamese citizens want to buy houses.
Quang also said that because of the complicated procedures, the feasibility of selling overseas apartments to Vietnamese buyers is very low.
vietnamnet, VnExpress
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