Funds Mobilisation via Property Market Seen Sluggish

Funds Mobilisation via Property Market Seen Sluggish

Enhancement of capital mobilisation via real estate transactions is now considered one of urgent issues of the Vietnamese economy in general and local enterprises in particular. To help domestic businesses take advantages of the property market, the Vietnam Chamber of Commerce and Industry (VCCI) on October 29 held a conference "Property Market: A Capital Mobilisation Channel".

Funds raising via the banking system in Vietnam is seen overloaded while the local stock market and domestic real estate market have yet developed to take their role of mobilising long-term capitals for the economy. Previously, VCCI co-operated with the State Securities Commission (SSC) to hold a conference on funds mobilising via the stock market. However, the market is still unfamiliar to entrepreneurs in Vietnam, so funds mobilisation via the channel is not effective.

Development of local property market is one of the most necessary requirements currently. According to Doan Duy Khuong Vice Chairman of VCCI, Vietnam targeted to mobilise US$60 billion in 2000-2005 period from all economic sectors. Over the past years, the economy depends mainly on the banking system and capital from the foreign direct investment source. It has not taken advantages of its own resources including lands despite the property market in Vietnam has developed considerably via two forms: official and unofficial real estate markets. According to estimation of the Ministry of Finance, there are only around 30 per cent of property transactions carried out via official way. The rest is beyond the State's control.

Meanwhile, representatives from the Institute of Finance attributed limitation in funds mobilisation via the property market to the shortage and hard approach to property information. In addition, organisations operating in the market in fields of consulting, brokering, assessing and trading haven't developed while the legal framework for the market has not also competed.

The most basic and important measure for making property market a funds mobilisation channel of local enterprises is the completion of legal environment. Besides, the government also has to pay attention to financial measures such as those relating to tax, fee and price for boosting legal property transactions. Representatives from the Finance Ministry said that in the coming time the government would issue a circular guiding for development of the real estate market. Hopefully, the legal document will help local firms to take full advantages of their assets including lands.

• Nguyen Thoa