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The Hanoitimes – Recipients of overseas remittance are buying land and houses instead of depositing money in banks or keeping the cash, as they believe that real estate prices will climb due to new government policies.
Nguyen Thi Ngoc of Nam Dinh City, for example, plans to buy a land plot with money her husband, a worker in Japan, has sent to her. “The land price in Nam Dinh is really reasonable,” Ngoc said. “Previously, you could not think of buying land if you did not have VND500 million in your pocket at least. But now you can buy a land plot with VND300 million,” she said.
Like Ngoc, many other Vietnamese, who have idle money, are seeking to buy land and houses instead of depositing money at banks, as deposit interest rates are on the decrease. Overseas remittance, is the money sent by overseas Vietnamese to their relatives in Vietnam. The money is given to their relatives in Vietnam to help cover their families’ basic needs or make investments.
Overseas remittance has been counted by government agencies, because this is considered an important source of foreign currency, and an important statistical figure for the government to make decisions to regulate the national economy. There is no official report about how kieu hoi is used, but economists believe that a high percentage is invested in the real estate market.
Unofficial statistics from foreign financial institutions said 52 percent of the kieu hoi in 2011, or $4.7 billion, was invested into the real estate market. A representative of the Dat Xanh real estate trading floor noted that the market has become busier following a series of government policies aiming to stimulate demand. He noted that it is a good time for buyers and sellers. It is the time when buyers receive money from kieu hoi to buy valuable assets, and prices are “very reasonable” thanks to an abundant supply.