Brian Jeffrey
Nguyen Van Dinh, the Vice Chairman of the Vietnam Real Estate Association, has raised concerns regarding current land pricing practices.
“Numerous regions are imposing exorbitant land prices, although their pricing approach, based on market transactions, appears justified,” he noted.
“Enhancing the administrative framework and consolidating regions could provide significant advantages for businesses, especially in real estate, by streamlining procedures,” Dinh stated at the forum titled “Real Estate Investment in the New Era: New Thinking – New Opportunities” held on July 3.
Nonetheless, he cautioned that real estate firms may encounter hurdles ahead, as the existing legal structure, while partially refined, is still imperfect and needs further revisions.
“Upon examining recent transactions, it was evident that many were significantly inflated. We can assert that certain market players manipulated these transaction prices. Consequently, utilizing these inflated values for official price listings legitimizes these ‘artificial’ or ‘bubble’ prices,” Dinh elucidated.
According to him, this situation poses risks by obstructing the flow of investment capital, as businesses that lease land are compelled to pay these inflated rates. Such inflated pricing can create barriers for those with genuine property needs in the market.
Dinh suggested that all property transactions should occur through trading platforms to enhance oversight and prevent manipulation, speculation, and price surges.
Le Xuan Nghia, former Vice Chairman of the National Financial Supervisory Commission and currently the Director of the Development Consulting Institute, reflected on the past, indicating that real estate policies often lagged behind the swift market changes, resulting in unfortunate repercussions.
In 2016, various ministries worked diligently to manage an oversupply of housing, which inadvertently led to a drought in new project developments in subsequent years.
“While efforts to manage project numbers were well-intentioned, excessive regulation, coupled with other factors, often intensified the supply shortage and has driven real estate prices up in recent years,” Nghia remarked.
However, he remains optimistic, believing that the real estate sector is on the cusp of opening up new and exciting opportunities.
“The government’s strategic initiative to combine provinces is set to ignite a robust wave of urban development across the nation. We can anticipate the emergence of modern satellite cities as well as vibrant twin cities, which will infuse new dynamics into the real estate market,” Nghia expressed.
“Establishing transparent financial records, meeting regulatory standards, and achieving credible ratings will be critical for businesses to engage in the ‘bigger games’ within the marketplace,” Nghia added.
