Real estate strongly attracts remittances

The expansion of land use rights for Vietnamese residing abroad in the newly passed Land Law is considered good news for the overseas Vietnamese community who wish to own real estate in Vietnam. This is even more meaningful when the remittance flow in 2023 reaches more than 16 billion USD, an increase of 32% compared to 2022.

OPEN OPPORTUNITIES FOR OVERSEAS VIETNAMESE

In the 2024 Land Law, a change that attracts a lot of attention is the detail of expanding land use rights for overseas Vietnamese.

Specifically, Clauses 3 and 6, Article 4 of the Land Law 2024 on “Land users” stipulate that land users are allocated land, leased land, and have land use rights recognized by the State; are using land stably and are eligible for issuance of certificates of land use rights and ownership of assets attached to land that have not yet been granted a certificate by the State, including: domestic individuals, Vietnamese immigrants. residing abroad as Vietnamese citizens; people of Vietnamese origin residing abroad.

Commenting on the new updates, Mr. Troy Griffiths, Deputy Managing Director of Savills Vietnam, said that this change will bring many investment opportunities for overseas Vietnamese real estate buyers. At the same time, it also creates great potential for the Vietnamese market thanks to direct investment capital from them. In the past, overseas Vietnamese who wanted to invest back in Vietnam had to go through relatives, thus leading to some unnecessary disputes. “The new law will solve the above problem and create more favorable conditions for investment, minimizing the possibility of risks arising between parties during the investment process,” Mr. Troy Griffiths affirmed.

Analyzing further, the expert shared that Savills has had the opportunity to cooperate with many Vietnamese people abroad. The main point now is that most of them are older. These may be people who migrated abroad. After many years of hard work, they own a certain amount of assets and should consider investing in Vietnam, even considering returning. However, it should be noted that there are many Vietnamese people working abroad, not only overseas Vietnamese but also people working abroad. They are also potential investors.

In fact, the report summarizing the work in 2023, the Ministry of Labor, War Invalids and Social Affairs said that the number of workers working abroad in the year continued to increase, with an estimated 155,000 workers going to the markets, reaching 129% compared to the year’s plan, an increase of 8.55% compared to 2022. By the end of 2023, there are 650,000 Vietnamese workers working in 40 countries and territories around the world. The largest market is Japan, followed by Taiwan (China), and South Korea. The remaining workers are concentrated in European markets, the Middle East and Malaysia…

INCREASE INVESTMENT IN RETURN IN REAL ESTATE

Mr. Troy Griffiths assessed that Vietnamese people value family values. This is a good tradition because it not only brings capital but also highly specialized skills that can be transferred to Vietnam. Therefore, the innovation of the 2024 Land Law is very welcome, expected to open up more capital and intellectual resources for the country. Typically the case of New Turing Institute and VinAi. This team includes 20 to 30 PhDs who have returned to Vietnam. They are using their knowledge and intellectual property to help Vietnam develop.

In addition, statistics from the State Committee for Overseas Vietnamese also show that the amount of remittances to Vietnam from 1993 (the first year of remittance statistics) to the end of 2022 reached over 190 billion USD, nearly equal to the amount of remittances. FDI capital disbursed in the same period. The record remittance source of 19 billion USD in 2022 alone has put Vietnam in the group of 10 countries receiving the largest remittances from abroad.

“The above data shows that remittances are a large and important source of capital for Vietnam. So the question is, how is it used when returning to Vietnam? This is quite interesting because there are slight fluctuations in currency rates. Specifically, if sent from the US, a strong USD means greater purchasing power in Vietnam. However, most remittances come from Asian countries through workers and many sources of money flow into real estate,” Mr. Troy added.

In fact, the demand for remittances in the real estate sector has been recorded. A statistic from 2016 from the Central Institute for Economic Management estimated that 15-20% of that amount was invested directly in real estate. If we do a quick calculation, this number alone can amount to about 10,000 apartments per year.

Many experts commented that expanding the rights of land users to groups of land users who are Vietnamese and Vietnamese citizens residing abroad is completely consistent with the policies of the Party and State. Specifically, treating Vietnamese citizens regardless of place of residence or place of residence. This policy is legitimate, and at the same time, also helps mobilize investment resources to Vietnam for socio-economic development. Especially, when it is forecasted that the real estate market in Vietnam will recover positively in the next few years.

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