Sept. 26 – Foreigners working in Vietnam for an extended period of time must find housing outside of a hotel, generally by renting an apartment/house. In 2008, after a good deal of debate, the door was also officially opened for foreign individuals and organizations, as well as overseas Vietnamese citizens and organizations, to purchase apartments (not individual houses) in Vietnam.
The real estate market has not been highly affected by the new policy. By the end of 2011 a total of 296 foreigners and overseas Vietnamese (mostly the latter) had purchased apartments in Vietnam.
But as Vietnam’s real estate market has been relatively stagnant for the last three years and is currently a buyer’s market, an increasing number of foreigners are considering this possibility.
As housing is a challenge facing all foreigners in Vietnam – one that often involves company support – in this article, we provide an overview of renting and owning apartments/houses in Vietnam.
Here, we discuss:
- Legal specifications for renting and owning
- Locations and pricing in HCMC and Hanoi
When renting apartments, lessee and lessor must fully exercise their rights and perform their obligations according to the Law on Housing and the Civil Code.
Foreign organizations and individuals renting apartments/houses in Vietnam must be allowed to enter and stay in Vietnam for three or more consecutive months.
House lease contracts must be written in accordance with the Laws on Housing. It is no longer required for these contracts to be notarized by a competent authority.
In order for an apartment/house to be put up for rent:
- The owner must have right of ownership certificates that meet the provisions of the Law on Housing and the apartment
- The houses or apartments need to be enclosed and separated from one another;
- The quality and safety of the building must be ensured;
- Electricity, water supply, environmental sanitation, security, and fire prevention safety standards need to be met.
- The building must be free of disputes over ownership and use rights.
- The house or building must be registered under a specific address and be outside of state security and defense areas.
A foreign individual is allowed to buy and own an apartment if he/she is:
- Employed as a manager by domestic enterprises, by foreign invested companies doing business in Vietnam, or if he/she invests directly in Vietnam.
- Contributes to Vietnam and is granted a medal by the President of the Socialist republic of Vietnam or is recognized by the Prime Minister;
- Works in eco-social fields, has at least a bachelor’s degree, and has special knowledge or skills needed in Vietnam; and/or
- Marries a Vietnamese citizen.
For an eligible foreigner to own and maintain an apartment, he/she must reside in Vietnam. A foreign individual can own a maximum of one condominium apartment (which must be part of a larger development of commercial houses) and can own the apartment for a maximum of 50 years from the date the apartment ownership certification is issued.
Those wanting to buy a house must submit the necessary dossiers to the competent state agency in order to get approval by the government. A foreigner may not lease their apartment or use it as capital for an enterprise, as a registered office or for any other non-residential purposes.
Locations and Pricing
In Hanoi, Tay Ho, Quang Ba, and Nghi Tam are the popular areas among foreigners.
In fact, in Quang Ba, Xom Chua is known as “Phố Tay,” which means “the street of foreigners.” Along this 1-kilometer stretch of road, there are nearly 40 buildings in which foreigners can find an apartment to rent.
In Hanoi, buildings popular among foreigners are beginning to emerge in areas like Nguyen Phong Sac and Nam Trung Yen (Tu Liem District) where the average monthly rental price ranges between US$600-US$700.
Trung Hoa – Nhan Chinh is another area with many villas and apartments frequently inhabited by foreigners. The average monthly cost ranges between US$2,000 – US$3,000. In My Dinh, Lac Long Quan or Cau Giay, apartment prices vary between US$250-US$600 per month.
The Manor and Golden Westlake also provide high-end apartments popular with expatriates and located within the city. The prices here range between US$1,800 and US$2,500 per month. Furnished apartments and separated villas are both available.
In Hanoi, Ciputra apartments currently range from US$1,400–US$2,200 per square meter. In the primary market, investors continue to lower the selling price. More than half of all new apartments are offered for less than US$1,000 per square meter.
Ho Chi Minh City
In the South, most foreigners live and work in urban areas such as districts 1, 2, and 7 (including Thao Dien and Phu My Hung Villa/apartment zones) of Ho Chi Minh and the surrounding areas like Binh Duong, Dong Nai, Ba Ria-Vung Tau.
Each area tends to be populated by foreigners from certain countries. For example, Korean, Chinese, Japanese, and Singaporean people often populate District 7 of HCMC, while many westerners from the UK, France, or the U.S. tend to gravitate toward the separated villas in districts 1 and 2 of HCMC.
The nearby Binh Duong area is populated by foreign business people who prefer to rent high quality furnished apartments. There are several “specialist villages” and compounds designed specifically for foreigners in Binh Duong New City, and these houses in the city center are quite expensive due to the restricted quantity and high demand.
Rent fees vary dramatically based on location. In HCMC in 2011, at the Saigon Pearl apartment condominium (Binh Thanh District), the monthly rental fee for a two-bedroom, furnished apartment was about US$1,300 per month, including management fees and taxes. At The Manor apartment condominium (Binh Thanh District), the lowest rental price is US$1,100 per month for a two-bedroom apartment, excluding the cost of utilities.
The rental price for houses in District 2 and District 7 ranges from US$1,500 to US$7,000 per month depending on the size of the villa or apartment. The area near Ben Thanh market (District 1) is preferred because it offers large 150-200 square meter villas and high standard apartments for about US$3,000 per month.
The first quarter of 2012 brought a decrease in selling prices in the prime real estate market of Ho Chi Minh City. Some investors have started promotional programs in an effort to attract clients, lowering their prices from US$830—US$2,500 per square meter to US$665–US$1,170 per square meter.
In 2011, a 73 square meter apartment in Thai An 1 & 2 condominium (District 12- HCMC) cost VND17 million per square meter (around US$830 per square meter). Phu My Hung condominium apartments were being sold for US$720–US$920 per square meter, depending on the size and quality of the apartment. In the high-end Sunrise City building (District 7-HCMC), apartments were being sold for US$1,600-US$2,500 per square meter.
Portions of this article were taken from the August 2012 issue of Vietnam Briefing Magazine titled “Human Resources for Foreigners from Vietnam.” In this issue, we take a look at foreign workers in Vietnam: how to hire, the legal obligations a company bears (including withholding and paying personal income tax and social insurance), and finally a common dilemma – the housing situation.
Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.
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