Shortcomings in Real Estate Market Management

 

Despite the issuance of many circulars and decrees to improve the management, the Vietnamese real estate market is still hanging about solutions to solve the problems. Recently, the Central Institute of Economic Management (CIEM) completed a study entitled “Real estate market development policies: International experience and lessons for Vietnam”. However, the study has just drawn out general remarks and has not yet outlined detailed solutions. Vietnam needs to outline experience in particular aspects of real estate market development policies of some countries in the world, including land survey modernization, housing and industrial parks, capital mobilization for real estate investor, non-standard lending, and experience in Chinese real estate market development.

 

Dr. Nguyen Van Chien of the Vietnam Research Institute of Land Administration said that the most prominent shortcoming in dealing with such a pressing issue is the absence of policies for market operation and development. Chien said the market development policies should cover policies for sellers, buyers, goods source development, market development, transaction supporting tools like real estate broking, notary service, legal consultancy, valuation, management mandate and real estate development, which have not yet been extensively and specifically analyzed.

 

In addition, the state regulation role via financial tools like tax policies, state investment funds, transaction limit policies, and transaction conditions has not yet been paid due attention. The loose management over activities in the real estate market has led to complicated market development. Investors boast great advantages but tax collection has not yet proven the potential.

 

Dr. Dang Duc Dam, Director of the Research Institute of Business Development said one important element for research priority is the policies for real estate, which is a pressing and essential issue.

 

According to the latest statistics of the Ministry of Construction, there are no communal and district cadres who are responsible for keeping a close watch on local real estate market developments regardless of two or three cadres at provincial level. This is an obstacle to the development as well as too-fast urbanization in localities nationwide. Rampant transferring and illegal construction happen more and more popularly and troublously.

 

Such big real estate markets like Hanoi and Ho Chi Minh City have only three contracted staffs at housing management offices. In addition to personnel shortage, the scope of the job is too professional and immense even though there is no data system for market analyse and regulation. Therefore, the management over the real estate market has been becoming scattered and inefficient. Due to the passiveness in market developments, long-term real estate market development strategies have not yet been drawn out, which has resulted in the abundant real estate goods in some urban areas and the severe shortage in other localities as well as sudden changes in the market.

 

The gaps in the management of the real estate market have resulted in the increasing number of investors and trading companies, which is inversely proportional to the quality and efficiency. Many companies start trading of real estate unpromptedly and unlicensedly. Many companies joining the real estate market just aim to supply goods for the market but are not aware of maintaining their trademarks and ensuring the quality and corporate prestige. They have not yet given priority to transparency and publicity.

 

The unprofessional trading in the Vietnamese real estate market has hindered large-scale and competent institutions such as banks and financial organisations, which major in supplying capital for the real estate market, from tightly regulating due to the lack of a legal framework. Such a shortage is also blamed for unbalanced and instable development of the real estate market.