Since the Ministry of Construction issued a circular that requests all real estate businesses to carry out transactions via registered trading floors, there have so far been hundreds of real estate floors set up nationwide. However, the number of transactions is still few.
Tong Van Nga, Permanent Deputy Chairman of the Vietnam Real Estate Association, said the competitiveness and transparency of real estate market in fact is very weak, both on the establishment and trading activities. Investors meet difficulties in seeking and implementing projects while people in need find it difficult to assess directly commodities and services. Thus, both buyers and investors expect the regulation of real estate trading via floor will contribute to boost the market and make it more transparent and sound.
Because of the regulations in the real estate trading activities, almost all real estate businesses have to date set up their own trading floors to actively trade commodities and many brokerage establishments have formed floors to legalize the brokerage. As a result, mass of real estate trading floors have mushroomed during the past time. According to the Ministry of Construction’s statistics, by the end of June, the country had 126 real estate floors and 8,724 individuals granted brokerage certificates and certificates of real estate assessment. However, the volume of real estate transactions vie floors is not much. Cao Le Tuan, Secretary of the Vietnam Network for Real Estate Transaction Centers, said only 25 % of real estate transactions were carried out via floors. The demand of transactions via floors is forecast at 30 % in 2010.
Mr Nga said that the Law on Real Estate and the government's Decree No 153/2007/ND-CP ruling real estate businesses must carry out transactions via registered trading floors from January 1 2009 arises from questions from investors and experts including those involved in procedures and sublicense, how to calculate added expenses from services on floors, the concept of standard floor. Now, the Ministry of Construction is still compiling standards for real estate trading floors. This is considered as hugest concern of real estate businesses.
Among regulations on functions of real estate trading floor, apart from the buying and selling, the floor must provide more other services like price assessment, real estate consultancy and management. However, the fact shows a majority is activities involving in brokerage. There are few big trading floors, which is specialized deeply in assessing and advertising. Meanwhile, many important aspects like legal services, consultancy, auction, real estate management are working perfunctorily. A few trading floors have operated sufficiently all aforesaid aspects.
However, some unregistered transactions outside floors in fact arise from the regulations of the trading floor. Under the regulations, assets traded via floor must ensure sufficiently legal papers while lots of properties have not enough ownership papers. Thus, cash on delivery transactions of properties still account for a majority. Many realty businesses still follow the form of advertisement on the press or trade via intermediaries while almost all buyers do not want to arrive in trading floors.
Many people said that trading via floor take much more time than via brokers. Moreover, transactions via trading floors will take a fee of 1 % -2 % of assets’ total value while the efficiency is unlikely higher than outside transactions. In Ho Chi Minh City, apartments traded via floors in the second quarter fell down 30 % compared to the first quarter while the secondary market operated well. Another factor making buyers not believe the transparency of realty trading floors is that investors and consultancy firms having set up trading floors to sell their commodities under a closed cycle.
Pham Sy Liem, Deputy Secretary General of Vietnam Construction Association, said that the establishment of trading floors with aim to sell commodities will cause difficulty in making the realty market transparent. Mr Hoang Van Cuong, head of the real estate faculty at Hanoi National Economics University also raises concern that the floors will be empowered to attest buying papers as official legal documents for transactors to make other deals instead of notary offices. If the management is not good, it will emerge negative consequences, he said.
Luong Tuan
Vietnamese
