May 05, 2022 | 18:15 GMT+7

Legal overlaps hampering real estate

Tra My - Phan Nam -

Many laws and regulations on the real estate market overlap each other and are inconsistent.

Photo: Illustration
Photo: Illustration

Limited capital and projects being delayed due to conflicting laws and regulations count among the main concerns of businesses in Vietnam’s real estate market, a conference to discuss amendments to the Law on Housing and Law on Real Estate Business held by the Vietnam National Real Estate Association (VNrea) heard.

“There are about 12 laws that are relevant and regulating the real estate market,” said Mr. Nguyen Quoc Hiep, President of GP Invest. “If laws are not consistent, they create a lot of problems.”

The current Law on Housing does not allow for the conversion of non-residential land to residential land, causing delays to some 400 projects in Hanoi and Ho Chi Minh City. As for the Law on Real Estate Business, there is a lack of a legal framework on the activities of intermediaries, among other issues.

Regarding capital for real estate, Mr. Vuong Quoc Toan, Chairman of the Lan Hung Real Estate Group JSC, said that if capital flows are not disentangled there will be more conjunction in the market.

Meanwhile, according to Mr. Truong Anh Tuan, Head of the Legal Department at VNrea, the country’s real estate market does not follow the laws of supply and demand. Demand is high while supply is low, causing prices to rise, so the most important problem is finding a solution to increase supply in the market. The real estate market is heated up by speculation, so the Law on Real Estate Business must prevent this by tackling financial issues such as taxes, fees, and technical measures.

Mr. Can Van Luc, a Member of the National Advisory Council for Monetary Policies, pointed out eight problems that need attention in the market, including unsustainable development, hindered management, an imbalance of supply and demand, and the need for regulations for new products, among others.

Dr. Vu Tien Loc, former Chairman of the Vietnam Chamber of Commerce and Industry, believes amendments to laws and regulations are needed. “We are now in the midst of an economic recovery and the real estate market influences this recovery,” he said. “Creating conditions for the real estate market to develop would help the economy recover and develop.”