Vietnam eases rules to woo foreign investors

Vietnam has eased restrictions on foreign ownership of property in an effort to lure the cash needed to revive a market saddled with oversupply since a real estate bubble burst in 2011.

The country has been battling with lingering bad debt after years of easy credit and lax oversight came to an end three years ago, sparking a crash in the property market and leaving the banking sector unable to provide the credit firms needed to grow.

Investors with business interests in Vietnam from Singapore, China and Japan were the most likely to buy property, attracted by the potential for higher yields in Vietnam than at home, property firms and analysts said.

Singapore and Japan are the second and third-biggest sources of foreign direct investment in Vietnam after South Korea.

Lawmakers amended the law on foreign property ownership last week to allow foreign investment funds, foreigners with valid visas, international firms with operations in Vietnam and overseas Vietnamese to buy residential properties. The changes will take effect in July next year.

Overseas Vietnamese send home about US$11 billion a year in remittances.