Disappointed by the lackluster performance of the Vietnamese stock market, many investors are abandoning securities investment and are instead looking to the property market to provide both long and short term gains.
Property prices in Vietnam have risen as much as 50 percent on average for 2007 and are poised to continue rising in 2008. What has helped fuel this increase is the number of expatriates that are purchasing property in their homeland. Due to the increased demand, the Vietnamese government has attempted to draft new property laws in an effort to curb these high prices.
Improvement is needed though when you consider the restrictive laws that Vietnam enforces on property. For one thing, Vietnamese government places many restrictions on who can own land and how that land is viewed. For example, as long as a foreign citizen has been registered as a Vietnamese resident, the citizen can own property. If though for any reason Vietnamese residency is revoked, the government will then assume control of the asset. The only exception is if the property is sold or donated within 90 days.
Analysts have spotted incredible potential in the Vietnamese property market. There is no question that if the government were to relax its standards and allow foreign investors opportunity to actually own land and property, the market would be much more flexible. Currently with so many limited investment opportunities, the market is just too restrictive.
In the long term, as Vietnam grows its travel market, foreign investors will continue to show interest in the development of the area. It is just a matter of time before the government realizes what steps are needed in order to give the market flexibility and sustainability.
