Realtors in Vietnam are reportedly showing delight for the newly issued decree on land management, which is being viewed in a positive light for the long- stagnant market.
The Decree 17 under the Land Law issued in late January by the government contains many regulations that should encourage transactions and effectively deal with difficulties faced by investors, said Nguyen An Binh, chairman of the Ho Chi Minh City Real Estate Association.
Accordingly, the decree allows investors and buyers to pay land-use fees later when undergoing procedures to obtain land-use right certificates or completing investment formalities; it gives more options to enterprises regarding land ownership and lets the prices set by local authorities to farmland requisitioned for industrial parks go abreast with those set by the market.
“The lack of money to pay the fees holds up vital land transactions and ties up the land until the money can be raised,” realtors said.
Previously only households in financial difficulty were entitled to delay the payables, Dang Hung Vo, Deputy Minister of Natural Resources and Environment said.
Tran The Ngoc, director of the HCMC Department of Natural Resources and Environment, said the new rule would encourage people to obtain land-use rights and consequently facilitate buying and selling activities.
Under the new decree, investors which are developing suburban area housing projects are now able to sell land lots after completing infrastructure work, Tran Manh Chau, general director of Saigon South Shareholding Co. (Sadeco).
The decree has eased financial pressure on investors as they no longer have to struggle with loans to build houses for sale as required by a previous decree, Chau explained.
For projects in other urban areas not entitled to land lot sales, the decree also provides conditions for investors to deal with capital shortage, if any.
Accordingly, investors can transfer part or all of their projects to other investors to carry out housing construction.
“The decree is aimed at taking advantage of different capital sources, especially from local and foreign credit organizations,” Deputy Minister Vo said.
Changes in the land law regulations are also being viewed positively as they address the issue of increased unemployment in rural areas due to farmland reclamation for industrial parks.
According to Vo, local authorities that reclaim local resident’s farmland must resettle them in other farming areas so that they can continue agricultural production.
The decree also asks localities to apply market property prices in calculating compensation rates. In February, relevant agencies will work together to lower land prices as market prices are now unreasonably high.
Also, the government will seek to adopt incentives for poor people to buy or lease houses and issue other measures to boost the market.
“The predictions are that house and land prices in Vietnam will continue decreasing until the profits earned by investors are just a little higher than bank interest rates,” Vo said.
Experts forecast three major trends in 2006: the housing market will be busier, real estate traders more professional and the challenges for domestic businesses harsher when foreign companies enter Vietnam to invest in infrastructure.
Vnexpres.net, Vietnam Financial Times
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