Many Property Regulations Overlapping, Irrational

 

With respect to business operations, construction investment and market development on real estate market, many experts said some provisions of existing laws are inconsistent with market developments, adding that, without timely solution, it will encumber the market. Mr Nguyen Quoc Hiep, President of GP Invest, pointed out that Article 57 of the Law on Real Estate Business poses risks to real estate business companies as it provides that investors must grant ownership books to homebuyers even when they pay 95 per cent of apartment value.

 

In addition, there is a regulation that a real estate project must set aside 20 per cent of land for social housing and this ruling is too rigid, according to experts. This land fund excludes another 20 per cent of land fund used to build schools. Procedures are too cumbersome and complicated for upgraded old apartments.

 

Mr Truong Anh Tuan, President of Hoang Quan Consulting Trading Service Real Estate Corporation (HQC), said the current credit mechanism for property projects also need to be adjusted to match the reality. Although up to 80 per cent of social housing projects are sold out without any guarantee from banks, the remaining 20 per cent are hard to sell without bank guarantee. This really upsets social housing developers. In addition, before announcing prices, investors of social housing projects must ensure the enough supply of materials for their projects till completion.

 

Mr Ta Van To, General Director of CEO Group, added that social housing demand is still high in big cities. However, access to preferential loans remains quite difficult. As for vacation property projects, according to the current law, investors must ensure the foot of the project to locate at least 100 metres behind the edge of the sea. But, there are still no specific regulations to this effect, thus raising a lot of difficulties to investors.

 

Ms Huong Tran Kieu Dung, General Director of FLC Group, said that current rules on certification and house sale to foreigners are unspecific and unclear. This is quite a potential segment but the deployment is very difficult because of insufficient licensing procedures.

 

Construction Minister Pham Hong Ha said the property market is showing signs of recovery and development. However, conditions for the formation and sustainable development of the real estate market are not enough yet. In the past time, although many regulations, mechanisms and policies on the property market have been issued, they are still incomprehensive, unreasonable and overlapping. For that reason, we need to complete in the near future.

 

To shape a transparent, well-informed and accurately-informed real estate market, the Government issued a decree on construction of property and housing project databases and information systems. If it is effectively executed, this will be the foundation to enhance State management and develop the real estate market more stably.

 

Resources for the real estate market are also one of important factors. At present, the market is still relying on three sources of capital, namely people, enterprises and banks. Compared with real estate markets in the region and in the world, the Vietnamese real estate market can open new capital flows from financial investment funds. With the involvement of financial investment funds, capital flows of the market will become more diverse.

 

Minister Pham Hong Ha also suggested six solutions for better controlling the real estate market: Capturing information and enhancing transparency; intensifying training, disseminating knowledge of construction investment, especially in the real estate sector; further studying and introducing new policies to develop capital markets for the real estate market; raising the quality of State management over the real estate market; reducing administrative procedures and facilitating investment in social housing development; and further developing social housing to meet the demand.