Business

Law change proposed to improve real estate market in Vietnam

SGGP
Ho Chi Minh City’s Real Estate Association (HOREA) has pointed out the problematic reality of Vietnam’s current real estate market and proposed changes for several regulations to improve the situation.

(Illustrative photo: SGGP)

(Illustrative photo: SGGP)

There has been a shortage of affordable residential buildings and apartment complexes in HCMC for the past two years. Many projects have been postponed indefinitely due to complications in procedures.
More specifically, 126 housing projects had their funding cut between July 2015 and August 2018 despite having official Decisions for investments due to failures in executing legal procedures, making their construction plans not approved. About 124 projects were allowed to be continued in March 2019, however there were still several ones not under constructions.
In 2018, the Ho Chi Minh City real estate market plummeted, with only 19 projects given to investors, 59 projects approved for investment and 53 projects granted construction permits, with 39,959 houses covering 3,263,212 m², which means 42% down in number of projects, 40% down in number of apartments and 74% down in total land area compared to 2017. In addition, only 8 projects were approved for investment with an area of 323,655m². At the same time, only 77 future housing projects were eligible to receive capital with 28,316 houses, 16.31% down in the number of projects and 34.14% down in the number of houses compared to 2017.
The situation did not improve in the first 9 months of 2019, with only 12 projects approved for investment and 24 granted construction permits. At the same time, only 32 future projects were eligible to receive capital with 19,662 houses, down 58.44% in the number of projects and 30.56% in the number of houses compared to 2018.
The shortage of housing products and subsequently increased housing prices are causing problems for middle-income and low-income people to acquire housing.
Additionally, according to HOREA, the inconsistencies between some regulations make a number of state officials unwilling to promptly handle companies’ case files and requests.
As a result, HOREA has proposed adjusting and supplementing a number of articles in the Construction Law, Housing Law, Investment Law, among others, in 2019 and 2020.
Specifically, Clause (2.c), Article 22 and Clause 4, Article 23 of the Housing Law are in conflict with Clause (1.b), Article 169 and Clause 2, Article 191 of the Land Law; and Clause 7, Article 19 of the Law on Urban Planning and Clause 1, Article 33 of the Investment Law are in conflict with each other.
In recent years, a number of businesses have been assigned urban and housing projects on a large scale, with administrative procedures resolved very quickly.

By Tra Giang - Translated b Tan Nghia

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