Local economists have proposed three solutions, which are believed to, along with the two recent decisions of Ho Chi Minh City’s government, help heat up the deeply sleeping real estate market in the southern metropolis.
The three proposals include “granting ‘red books’ to help businesses get bank loans”, “allowing overseas Vietnamese (Viet Kieu) to buy houses and “exempting land use fees for low income earners”.
According to experts, one of the main difficulties hampering real estate project development is that real estate businesses cannot take out bank loans to continue projects after site clearance as they do not have ‘red books’ (land right certificates).
Under regulations set up by the city’s authority, the red book is granted only when businesses finalize construction of infrastructure. Implementation of many projects in HCM City has been delayed due to the regulations, and several real estate businesses have had to shut down due to the lack of capital.
At a meeting between the city’s authority and more than 100 real estate businesses on November 25, businessmen again asked the city to create more favorable conditions for them to access bank loans for re-investment. This proposal has been raised many times, and Deputy Minister of Natural Resources and Environment, Dang Hung Vo once said it was ‘reasonable’.
Secondly, many Viet Kieu have bought houses despite the fact that regulations allowing Viet Kieu to buy property have not been issued. Experts point out that the involvement of Viet Kieu in the real estate market is also a positive factor heating it up.
Dao Duc Nghia, Director General of Cotec said that high-class apartments and villas could not find many customers, but sell well to foreigners. At Phu My Hung urban area, for example, foreigners can lease houses for 20 years, which should be seen as a form of house ownership.
Under the recently approved Law of Real Estate, only some overseas Vietnamese, who are rated as patriots, are allowed to own houses or flats in Vietnam.
Thirdly, houses for low-income earners and houses for resettlement are problems that draw much attention from both enterprises and state authorities. This group has a real demand for accommodation, but cannot afford houses, while speculation activities have frozen the market.
Businessmen have said that the government should exempt land usage fees for low-income earners, who should be allowed to buy houses under the mode of deferred payment in 15-20 years. A program on houses for low-income earners would be a big potential market, and if it could be implemented, it would help heat up the real estate market.
Earlier this week, the municipal government has released two decisions, one to revoke the rule over recalling 10 per cent of land or 20 per cent of houses from housing development projects to resell to the city (at prices allegedly much lower than market-based ones) and the other to agree in principle to conditioned project transfers.
Young People
Vietnamese
