Vietnam - Property market needs solid legal footing

The Vietnamese property market needs a legal system that can manage activities on the market and develop housing and apartment building for lease projects, said the deputy prime minister.

Deputy Prime Minister Hoang Trung Hai said while meeting the central steering committee of housing policy and real estate market on Tuesday that this year, the legal system for housing management and the real estate market should be completed, including property tax and prices, individual income from property trading, registration of property and mortgage of land use rights. Cities and provinces would manage housing policies and the property market based on those regulations.

"We could not manage an active and highly-competitive property market by administrative orders. The market needs a fully-complete system of legal documents. Additionally, the management offices should build database systems for housing and the real estate market," Hai said.

These issues are still weak. With further investment, the management offices could make better management decisions.

To ensure success in implementing the National Housing Strategy approved by the government, Hai asked the Ministry of Construction to issue documents that guide the national housing strategy that focus on research and development of rented properties.

Additionally, the ministry should find suitable investors and managers for developing rental properties to meet the high demand on this segment, said Hai, adding that a housing saving fund should be built to add an effective channel of providing capital to the property market.

The Deputy Prime Minister said the real estate market does not have a long-term capital mobilisation channel, while the only banking system is responsible for providing long-term capital for the market. So, the real estate market should soon find a new capital mobilisation channel to reduce reliance on the banking system.

The ratio of credit for real estate continues to be controlled by ensuring the inflation target.

Deputy Minister of Construction Nguyen Tran Nam said an important task in 2012 is to fund unfinished real estate projects, recover the market and the trust of customers in the market.

Nguyen Manh Ha, Director of Housing and Real Estate Market Management Department of the Ministry of Construction, said the ministry has proposed the house saving funds have two kinds. One kind is for low-income people getting loans to buy or lease social houses and the other is for middle-income people getting loans to buy commercial house. If the two funds get approval, these models will be built on trial at Ha Noi and HCM City.

At the meeting, Deputy State Bank Governor Nguyen Dong Tien said current price of property products was too high in comparison with affordability of the people and real value of property products. So, addition of capital to the market must be very careful.

According to plans set out each year, Viet Nam will develop an additional 100 million sq.m of new houses. But in 2010 and 2011, the country developed only 80-90 million sq.m of new houses each year.

Last year was a hard year for the domestic property market because of too high prices and tightening policies of credit for the market so there was low capital for development of property projects and buying of property projects.

The domestic property market was expected to recover this year with the addition of more investment from home and abroad, as well as a looser credit policy, experts said.

Vietnam News

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