After a long slow down, investors in real estate was at a dilemma. Now, as the property market seems to be reactivated, the State Bank decides to facilitate access to credits. According to Mr. Nguyen Manh Ha, Head of Housing Department, Ministry of Construction, capital is not the most important factor to boost property market. With lower expenses in land clearance, building materials and access to credits, the real estate price will be lower.
Economists believe that with current prices, 80 percent of the population cannot afford to buy houses, how do you think?
I think, it is partly due to short supply and low-based economy. We are trying to meet the demand but it will take longer time. In fact, the people have already some dwelling (owning a house or renting) but far from satisfaction. The State tries some solutions to improve the situation by increasing access to credits and housing development.
According to a survey by foreign companies, Vietnam has a surplus of high quality houses, does it mean mismanagement in the supply?
The surplus is caused by policy, taxation and planning. The State cannot compel investors to build houses for the low income. We can only indicate investors housing demand. Currently, there is a big demand of average houses that investors can make profit.
With the encouragement of the State in credits, do you think that it will increase the demand in property market?
It is a good sign for both people and businesses. The real estate business will get warmer. However, capital is not the most important factor. I think if expenses decrease in land clearance and building materials the prices will be lower.
Due to shortage of capital, investors have to mobilize it from the people even for
projects without land clearance running high risk for both. Should such capital mobilization be under control?
In fact, Property Law provides clearly when mobilization and sales can be made. The capital mobilization by investors for projects is legal and cannot be prohibited. However, we advise the people to consider carefully the terms and the feasibility before signing contracts including consultations with law firms.
Besides, when contributing capital, they are also doing business and taking risk. If the project is successful, would the people share the profit with the investors? I don’t think so.
It is very difficult to control such capital mobilization as it is civil contract and agreed upon by both sides. I think the contract should include penitentiary clauses for the case of failure. Investors must use the capital correctly for the project and not for other purposes.
In reality, with the fluctuation of the market, the investors cannot possibly forecast the prices. Due to force majeur, investors and related people should sit down and negotiate on prices and mobilized capital. It will be much complicated in the court.
Regarding provisions of contract, I think both Civil Law and Housing Law must be reconsidered to cover the vacuum.
Can the introduction of property transaction floor prevent such capital mobilization?
The property transaction floor is an advanced and useful instrument for the people. The people can get specific consulting service. Buyers, sellers and managers will become professional. With more information, the people make right decision.
Will the transaction floor become backyard of property businesses?
Commodities must be sold at the floor. We cannot predict whether it will become backyard. It depends on the competition, the people will invest where they trust. Inefficient businesses will negate themselves. The final choice is made by the people.
Luong Tuan
Vietnamese
