|Property market's development is said to be more stable in 2015. – Photo canhotot.com
It is a fact that Viet Nam's real-estate market's development has been unstable. What are the main reasons behind this?
One of the main reasons that have rendered the property market unstable is that the relevant legal frame work governing the sector remains unorganized. The Ministry of Construction has submitted a proposal to the Government and the National Assembly to amend and supplement the Law of Housing 2005 and the Law of Property Trading 2006. I believe that once these laws are amended, they along with the amended Land, Investment and Enterprises Laws will greatly influence the property market going forward.
Could you tell us more about the major changes in these amended laws?
The Housing Law and the Property Trading Law, which were amended by the National Assembly on November 25, 2014, resulted in many changes. These changes can be held responsible for a breakthrough in the area. One of the new articles in the law clarifies that: the construction of projects must be included in the country's plan and approved by the appropriate state body to ensure that the property market develops stably, transparently and efficiently.
The projects excluded from the country's construction plan must not be built.
The amendment of the Housing Law distinguishes two types of housing: commercial and social housing. The former type is for those, who can afford property at the existing market price, while the latter is for low-income earners and is supported by the State.
The Law has also expanded the scope for Vietnamese residing abroad and enterprises with foreign direct investment (FDI) to trade in real estate in order to attract foreign investment in the property market and create competitiveness.
The amended Housing Law has also made it easier for foreigners wanting to buy or own property in Viet Nam. Accordingly, foreigners, who are allowed to enter Viet Nam are legalized by virtue of their buying property and have to own it for 50 years and can extend the ownership rights if they wish. Meanwhile, FDI enterprises are permitted to purchase property to set up offices, workshops, or factories.
What will the Construction Ministry do to enforce these laws and to promote the development of the real-estate market?
This year the ministry will issue circulars and decrees to help implement the Housing Law 2014 and Property Trading Law 2014 to ensure that they are enforced from July 1, 2015 onwards.
The ministry will also continue to cooperate with banks to effectively implement the decree issued on August 21, 2014 to remove impediments faced by property businesses in the market and at the same time help low-income and underprivileged people gain access to social housing projects.
Specifically, the period for bank loan repayments for social housing owners will be extended to 15 years from 10 years. Conditions for people, who wish to take loans from a VND30 trillion package, will also be eased. Hence, the targeted customers of the VND30 trillion property loan package will include those, who wish to buy social housing for renting or reselling purposes, for workers, students and those who are subject to social housing and regulated under the decree dated November 20, 2013.
From your point of view, how will the property market perform in 2015?
The amended laws that I have mentioned before will surely help synchronise the legal base for operations in the property market. They will also help remove difficulties and warm up the market. The laws will improve efficiency of the state's management of housing development, as well as the property market.
Consequently, the property market will continue to grow in 2015 with stable prices and more transactions. However, I predict that the property inventory will decline. The projects, which are located not too far from city centre, which possess fundamental infrastructure, and are constructed on schedule, will attract more customers.
However, the problem is that the property available in stock is located far from the city centre, has poor infrastructure and the flats are too big in size.
On the other hand, mergers and acquisitions will become a trend among property developers. Businesses that are facing difficulties will merge with or will be acquired by larger ones.
Particularly, foreign investors will acquire the projects facing financial difficulties. Therefore, foreign investment in the sector will expand.
The projects that were halted will also be resumed this year to ensure the rights of the customers.