Amended Law on Housing and Real Estate Business: Instant Change Impossible

Real estate experts all shared a common opinion that the amended laws will certainly bring positive effects to real estate market in general, but considering current circumstances, it's not the magic wand that can conjure instant recovery.

 

According to Mr Tran Khanh Quang, General Director of Viet An Hoa Company, the amendments focus mostly on protecting buyers, enhancing transparency in investors’ side and demanding higher standards from companies and individuals that act as brokers. Besides that, the amended law allows foreigners to have more opportunities to own houses in Vietnam. But to translate all of this into practice will take at least another six months to a year.

 

Mr Quang explained that the reason it takes that long for new regulations going into practice is because guiding circulars, most likely joint circulars of concerned ministries and agencies, will need time to interpret in detail the implementation of each regulation. Every new policy has a certain lag, because to be able to touch specific problems in real life, it is necessary to dissect it in many aspects and propose more solutions. “We should not hold unrealistic expectations or dream of a solution that can bring immediate results. More than ever, we need to stay sober to embrace opportunities as well as challenges from the new policies. If incentives are unreasonable, it can also cause many obstacles,” said Mr Quang.

 

Mr Nguyen Nguyen Thai, CEO of TCF Vietnam, also believed that the real estate market will require quite a time to seep down effects of the new policies, it’s unwise to expect the Amended Housing and Property Business Law will immediately bring changes to the market. New adjustment based on the new regulations is essential for the development of the market but it would not alter the face of the market strongly and instantly. The law has listened closely to practical situation but for the real estate market to develop sustainably, the economy itself also must achieve steady growth, especially GDP must make significant growth, which is a very difficult task for the economy of Vietnam in short-term.

 

Vietnam's GDP is currently still quite modest, Vietnam needs more time for the economy to stabilise and reach better GDP growth. Subsequently, the authorities should facilitate the penetration of new policies into the market. The resonance of economic growth and the new policies will undoubtedly create positive effects for the market.

 

In another aspect, Mr Nguyen Vinh Tran, CEO of Jen Capital JSC stated his view: “policy only is not enough to stir the real estate market at this point, policy is the base, the foundation for growth, while stirring up the real estate market requires the participation of many factors. Among them, the most important factor is determination from the government in helping new regulations and policies be applied quickly, clearly and fairly. Additionally, investors also need to implement new provisions properly. Other market participants must take responsibility in building a healthy real estate market with fair competition”.

 

Mr Tran added that if the people, especially those in need of housing, have an understanding of the regulations and know how to pick good products selection, combined with banks' commitment on stable funding for businesses and consumers, it would create far-reaching effects on the market. According to this expert, the date to apply the new rules is coming near but detailed documents guiding the implementation have not been introduced properly. Real estate businesses and banks are preparing their own procedures. Specifically, the content of allowing foreigners and overseas Vietnamese to buy houses is still very vague about the implementing regulations. Each place has their own regulations and ways of doing things, meanwhile banks and real estate firms are still awaiting the circulars on guarantee.

 

Therefore, all experts agreed that for the Law on Housing and Real Estate Business to be able to integrate in real life, the authorities should issue detailed guiding circulars soon so that businesses, customers and investors can implement immediately. Mr Nguyen Vinh Tran said after July 1st, the real estate market might “miss a beat” due to the lateness of circulars.