The real estate market, particularly the apartment segment, has consistently attracted the attention of investors due to its profit potential and value appreciation over time. However, to invest in apartments safely and effectively, it is essential to thoroughly understand the relevant legal provisions. So, what are the current regulations governing apartment investment?

I. The current demand for apartment investment in the market

With Vietnam’s economy continuing to grow, rapid urbanization, and an expanding middle class, the demand for housing, especially apartments in major cities, remains high.

It creates a highly potential investment market, appealing to both domestic and foreign investors. Apartments not only meet actual housing needs but also serve as a potential investment through leasing or resale when property values increase.

II. Legal provisions related to apartment investment

1. Definition 

Apartment investment can be understood as an act of individuals or organizations using their capital to purchase apartments for profit through leasing, resale, or exploiting other values from the property. Although the law does not provide a specific definition of apartment investment, such  an activity is governed by general provisions on real estate trading, ownership, and transactions.

2. Legal conditions for apartment investment

To implement apartment investment, developers must meet the conditions stipulated in Clause 2, Article 35 of the Law on Housing 2023, including:

  • Possessing equity capital as required by real estate business laws for each housing project;
  • Having lawful land use rights or being allocated or leased land in accordance with the Land Law;
  • Demonstrating sufficient capability and experience to implement housing construction projects as required by law.

Therefore, lawful apartment investment requires investors to have proper legal status and satisfy the statutory conditions above.

3. Conditions for purchase and sale in apartment investment activities

Clause 1, Article 160 of the Law on Housing 2023 provides that transactions such as purchase and sale, lease-purchase, donation, exchange, mortgage, or capital contribution involving housing are permitted only when the house meets the following conditions:

  • Possessing a Certificate of Ownership as prescribed by law, except in cases under Clause 2 of this Article;
  • Being not subject to any ownership disputes, complaints, or lawsuits;
  • Remaining within the ownership term, where applicable;
  • Being not subject to seizure for enforcement of judgments or administrative decisions in force, nor subject to interim injunctions or preventive measures by competent authorities;
  • Being not located on land subject to recovery, clearance, or demolition decisions;
  • The conditions in points (b) and (c) above do not apply to transactions involving houses formed in the future.

Hence, apartments must satisfy these legal conditions before being transacted or sold.

III. Questions regarding apartment investment

1. Are foreign investors allowed to invest in apartments in Vietnam?

According to Point (a), Clause 1, Article 35 of the Law on Housing 2023, investors in housing construction projects include:

  • Enterprises or cooperatives, including foreign-invested economic organizations established and operating under Vietnamese law and engaged in real estate business (hereinafter referred to collectively as real estate business enterprises) that meet the conditions under Clause 2 of this Article.

Therefore, foreign investors are permitted to invest in apartment construction in Vietnam if they meet the statutory requirements.

2. What is the procedure for purchasing an apartment?

Pursuant to Article 162 of the Law on Housing 2023, the procedure for housing transactions is as follows:

  • The parties negotiate and enter into a sale and purchase agreement containing the details prescribed in Article 163 of this Law;
  • The investor is responsible for completing procedures for the competent authority to issue the Ownership Certificate to the purchaser, unless the purchaser voluntarily undertakes the process;
  • In cases where the purchaser acquires both the apartment and the associated land-use rights, the competent authority shall concurrently recognize ownership of the house and the right to use the residential land.

3. What are important considerations when investing in apartments?

When investing in apartments, investors should pay particular attention to the following:

  • Reputation of the investor: Choosing investor with proven financial capacity and project experience;
  • Location and appreciation potential: Prime locations with good connectivity and nearby amenities tend to appreciate faster;
  • Construction quality and facilities: Ensuring the project meets quality standards and offers comprehensive amenities;
  • Legal status: Carefully reviewing all legal documents, including land allocation decisions, construction permits, and sales licenses;
  • Price and payment terms: Considering the pricing structure and payment schedule stipulated in the contract;
  • Rental or resale potential: Assessing market demand for rental and resale liquidity before investing.

4. What are the risks of investing in future-formed apartments?

Investing in future-formed apartments has certain risks, such as:

  • Construction delays: Projects may face postponements or suspension;
  • Quality discrepancies: Delivered units may differ from initial commitments;
  • Legal issues: Projects might encounter legal obstacles affecting ownership rights;
  • Market fluctuations: Apartment values or rental demand may not meet expectations.

Therefore, purchasers should carefully evaluate the investor 's reputation, project legality, and contract terms to safeguard their interests and minimize risks.

IV. Legal consulting services supporting apartment investment

The above article by NPLaw provides an overview of current regulations on apartment investment. With a team of experienced lawyers and legal specialists, NPLaw delivers professional and reliable legal services to best protect clients’ legitimate interests. Should you require legal assistance, please contact NPLaw for consultation and support.