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As maForeign investment pours into real estate marketny as 389 foreign-invested projects were licensed to operate in the domestic property market in 2012, with a total capitalisation of around US$49.8 billion.

Foreign direct investment (FDI) injected in real estate projects alone accounted for 23.32 percent of Vietnam’s total FDI last year.

Ho Chi Minh City attracted the bulk of the real estate FDI, with 163 projects worth US$12.4 billion.  It was followed by Hanoi, Ba Ria-Vung Tau, Phu Yen, Binh Duong and Dong Nai, consecutively.

Singapore is currently the largest foreign trade partner of Vietnam’s real estate sector with 55 projects capitalised at US$8.6 billion. The Republic of Korea ranks second with 79 projects worth US$6.7 billion.

Most foreign investors are involved in the construction of luxury hotels, resorts, offices for lease, and high-end apartments.

According to the Ministry of Planning and Investment (MPI), progress was made in FDI disbursement, but a number of projects were slow going due to mechanisms and policies on land use and management.  Compounding the problem are difficulties caused by the economic slowdown, such as inflation, land acquisition and compensation, and complicated procedures on investment licenses.

To attract more foreign investors, the MPI suggested simplifying investment procedures, reforming the legal framework on mortgage loans, and setting up funds for housing development in specific localities.


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