The real estate market will recover when the legal bottleneck is removed

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the real estate market will recover when the legal bottleneck is removed
Mr. Le Hoang Chau, Chairman of HCM City Real Estate Association.

The unbalancebetween supply and demand, as well as lack of supply of cheap houses in the real estate market, causesa lot of instability. In particular, in the past few years, lack of supply has led to a decrease in housing prices as expected by many people. How do these shortcomings need to be addressed?

There are still many concerns to pull house prices down and there are more affordable commercial housing projects and many social housing projects meeting the huge housing needs of many people with average and low income.

To do this, in my opinion, it is necessary to change the current collection of land use levies into a tax imposed on “the act of changing the purpose of using land from agricultural land, non-agricultural land to residential land”.

The tax rate is transparent (maybe 15-20% of the land price in the land price list), this both eliminates the “ask – give” mechanism, and also reduces the payment of land use fees. With current practices, it will contribute to reducing housing costs, thereby facilitating lower prices for housing.

I also want to emphasize that, in the past five years, there have been hundreds of housing projects with congestion in investment and construction procedures, due to projects with mixed land funds or using public land subject to review, control and inspection, even if there are projects that are not entangled, the time for administrative procedures is still delayed. This is caused by the congestion of legal institutions, leading to the inability to build a standard and reasonable administrative procedure, giving rise to negative effects, harassment and arbitrary of some “administrative people”in public service.

Therefore, it is necessary to build a “standard process”, shortening the time for administrative procedures. In addition, real estate businesses expect results of the implementation of the e-government, one-stop shop at level 4 (civil servants handle dossiers of requests and administrative procedures, but do not havedirect contact with people and businesses) will both shorten the time of administrative procedures while overcoming the situation of harassment, negativity, and practically contribute to reducing housing prices.

In particular, reducing the cost will contribute to reducing housing costs. At the same time, it is necessary to promptly allocate capital and create conditions to increase the supply of social housing.

Proposing the Government to soon issue a “Resolution on solutions to encourage the development of low-cost commercial housing projects” with mechanisms and policies to support credit, tax, land access, and construction investment procedures to encourage businesses to invest in these projects to provide low-cost commercial housing (1-2 bedrooms) at a price of about VND20 million/m2 for the provinces and the price is aboutVND 3-25 million/m2 for grade 1 cities, special grade cities, creating a good basis and motivation for the real estate market to continue to develop.

Do you have any recommendations to continue to remove bottlenecks and create favorable conditions for the development of the real estate market?

Although currently facing many difficulties, the real estate market has the ability to rebound strongly as soon as the Covid-19 pandemic is under control, provided that the legal bottlenecksare removed.

Currently, the Law on Investment and Construction Law (amended) hastaken effect and is expected to remove some bottlenecks of the real estate market. In 2021, the association proposed to the Government and the Standing Committee of the National Assembly to consider the “Project to amend the Land Law 2013”, at the same time, propose to consider amending and supplementing a number of articles of the Law on Housing; Law on Real Estate Business; Urban Planning Law; Law on management and use of public property; the tourism laws; Social legal; Law on Bidding; the Law on Property Auction, to ensure the consistency, synchronization and continuity of the legal system, thereby continuing to solve the remaining problems so that the real estate market really develops in a transparent and healthy direction.

At the same time, it is recommended that the Government soon consider issuing a number of important documents directly related to investment projects, housing projects and real estate markets, such as the Draft “Decree on Expenditure Regulations implementation of a number of articles of the Investment Law 2020 ”, to ensure consistency and synchronization with Decree 148/2020 / ND-CP; Draft “Decree amending and supplementing a number of articles of Decree 100/2015 / ND-CP on development and management of social housing”, aimed at promoting the development of social housing; Draft “Decree amending and supplementing a number of articles of Decree 167/2017 / ND-CP on the arrangement and handling of public assets” for rational handling, facilitating a restart of hundreds of investment projects and housing projects using State-managed land funds, on the principle of ensuring no loss of public assets and state budget revenues.

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