12:36:02 PM | 2/27/2020
In the context of negative impacts of coronavirus outbreak on the economy, legal problems and credit tightening, real estate businesses gathered to discuss their hardships in business operations before sending recommendations to the Prime Minister in March 2020.
Mr. Nguyen Tran Nam, Chairman of the Vietnam Real Estate Association (VNREA), said that, impacts of credit tightening in real estate business plus legal and procedural difficulties from project establishment to project completion stagnated the market. VNREA is integrating the overall landscape of property transactions in 2019 and project licenses and collecting recommendations for submission to the Prime Minister.
He said that targets and plans may not be achieved in the first quarter because property supply, demand and transactions decreased. Coronavirus disease (Covid-19) adversely impacted the property market. The slowdown of the real estate market also dragged many other sectors such as construction and building materials. Therefore, without a timely solution, the market may fall further in 2020-2021.
Mr. Pham Thieu Hoa, General Director of Vinhomes, said that Vinhomes collected opinions from its subsidiaries about hardships that afflicted the group’s business operations. Accordingly, the first is about policies on condotel, officetel and resort villa. Other setbacks lay in property ownership certificate, bidding shortcomings in investor selection, property deal transfer and BT project payment.
Ms. Nguyen Thuy Duong, Communications Manager of Novaland Group, said, central and local authorities made great efforts to help businesses to deal with difficulties, especially in the last months of 2019. For example, Novaland Group's project, Grand Manhattan, at 100 Co Giang, District 1, Ho Chi Minh City, was supported in a timely manner and was granted a construction permit by the HCM City People's Committee and the Department of Construction.
Currently, the Department of Natural Resources and Environment is considering certificates of land-use rights and assets on land to people buying these projects. This demonstrates the support of all tiers of government and branches in solving problems for businesses, she said.
Before this market context, she hoped that Novaland would quickly carry out this project in order to increase supplies to the market and meet people’s housing needs.
Mr. Nguyen Van Phuc, Former Deputy Chairman of the National Assembly's Economic Committee, Member of the Executive Board of the Vietnam Real Estate Association, said, there are two issues of current concerns: (1) solving legal shortcomings and (2) capital shortages. Regarding legal issues, real estate businesses joined forces with the VNREA to bring to the law-making National Assembly issues that need to be addressed. What can be done immediately should be done immediately, accurately. With respect to capital issues, businesses need to explain, research and make specific recommendations to convince the Prime Minister.
According to Mr. Nguyen Trong Ninh, Director of the Housing and Real Estate Market Management Department under the Ministry of Construction, legal issues are being solved by ministries and central agencies, with a focus on amending the Land Law. The Ministry of Construction collected opinions from businesses and the ministry planned to propose solutions to facilitate the sustainable property market development at the upcoming meeting with the Prime Minister.
Mr. Nguyen Tran Nam appreciated opinions from businesses, saying that four major issues that will be summarized in writing and sent to the Prime Minister: (1) solutions to deal with obstacles in Decree 20; legal framework for real estate projects; administrative procedures; and funding and interest rate cuts. The proposal will include market information, recommendations on laws, regulations, documents and detailed solutions for each proposal to be submitted to the Government.
Despite a lot of difficulties, the real estate market also witnessed some good news. Mr. Nguyen Tran Nam said, the Vietnam Real Estate Association repeatedly pointed at shortcomings in Decree 20/2017/ND-CP on tax management for companies with affiliated transactions and got feedback from the Ministry of Finance. Besides, after VNREA sent a series of petitions and proposals on certification of condotel ownership, the Ministry of Construction also grasped and announced solutions. Recently, the Ministry of Natural Resources and Environment issued documents on property ownership certificates. This is one of positive signals for the real estate market in general and condotel in particular.
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Mr. Nguyen Quoc Hiep, President of GP.Invest In the business community, real estate companies are the toughest because they are governed by about 10 laws. And, Vietnam's real estate market is caught by a matrix of laws. For example, more than 200 projects in Ho Chi Minh City are not approved owing to overlapping laws, particularly the Land Law. Therefore, the first recommendation is to amend the Land Law because of its existing shortcomings. One of our projects was granted an investment certificate in April 2018. When all procedures were completed, the project was stuck in the Land Allocation Decision because it was conflicted with the Land Law. We had two choices: Quit it or start it over. We had to go back another year and work with five localities and departments. This is an arduous period for a company like us that hardly anyone can understand. Ms. Huong Tran Kieu Dung, General Director of FLC There are three major issues in the real estate market that need to be considered: Law, capital and administrative procedure. Legally, major concerns lie in four laws: Law on Investment, Law on Housing, Law on Land and Law on Bidding. The first glitch is the conflict between the Law on Land and the Law on Bidding in land allocation, bidding and auction. Accordingly, provinces and cities do not allocate much land to businesses. If this reality is not addressed, very few projects will be approved for construction next year, thus reducing opportunities for local economic investment. Perhaps, it takes two years to complete all formal procedures for a construction project. This upsets companies. The second drawback is interrupted public land. According to Decree 67, this public land must be auctioned. At present, there are no instructions if the investor carries out a project where there is a public land plot. How will this be handled? The third is annual rent payment and one-time rent. The fourth is design evaluation. Some projects have hundreds of small works. It will be very problematic if they follow current regulations. Particularly, for condotel, Vietnam currently has not allowed foreigners to buy this product. Therefore, we should allow foreigners to buy this to better develop this market. Companies need good policies to unlock investment fund flows. It has already been three years since the Government has had another stimulus package for the real estate market. Meanwhile, the VND30-trillion package has long been terminated. Therefore, businesses expect the Government to pay more attention to funding sources to spur the market. Regarding administrative procedures, the government is currently advocating streamlining administrative procedures but internal procedures are not as smooth because they are conducted through many time-consuming stages from central to local levels. Ms. Nguyen Thi Quynh Chi, CEO of Eurowindow Holding It is no coincidence that the Prime Minister requested relevant bodies to listen to what businesses are saying, especially in the context of the Covid-19 epidemic which is badly hurting the vacation property sector. Eurowindow Holding recommends that the Prime Minister have policies to support condotel businesses such as tax cut, interest rate cut and specific support policies for businesses, and build a safe destination for doing business. To date, plans are hard to carry out because we do not have many customers as expected. Besides, property supplies and property deals may go down this year due to legal procedures. I think one of the main policies is funding source for real estate businesses. Secondly, we are caring much about Decree 20. We hope that VNREA will continue to make recommendations to amend this rule. |
By Huong Ly, Vietnam Business Forum
Vietnamese
