At the end of November 2014, Vietnam’s National Assembly passed the long-awaited Housing Law that addresses a number of issues including regulations on foreign ownership of properties in Vietnam, replacing the pilot scheme that expired in December 2013.

Dung Duong, CBRE’s head of research for Vietnam commented: “The relaxation of foreign ownership restrictions is more significant than anticipated and marks a strong step towards opening up the Vietnam real estate market to overseas investment.”

The Vietnam residential market has seen slow growth in recent years due to a number of factors including the previous restrictions on foreign ownership; the lack of quality developers; a speculative bubble from 2006 to 2008; the small size of the leasing market and more attractive and transparent investment opportunities elsewhere in the region.

The new law is expected to play a major role in addressing many of these issues and will help create a more balanced, transparent and sustainable residential property market in Vietnam. Removing many of the conditions on the foreign ownership of property will boost demand and help improve market liquidity, especially for mid-to-high-end residential housing as well as vacation and/or second homes.

The new law will come into effect from July 1, 2015 and removes many of the previous restrictions on foreign property investment.