Property sales rule draws criticism
Property sales rule draws criticism
Real estate developers proposed doing away with the regulation that all property transactions be carried out on the trading floor, saying the rule had not achieved the desired effect.
Created in accordance with the 2006 Law on Real Estate Business, the regulation sought to make the property market more transparent.
But while major investors, particularly State-owned enterprises, complied with the regulation, many other developers did not, said Dang Tien Phong, director of Song Hong Joint Stock Corporation under the Ministry of Construction.
Instead, many investors negotiated directly with buyers and set their own trading floors or associated with other trading floors, which failed to ensure transparency.
"If the regulation is not removed, it might create an unfair playing field," Phong told Viet Nam Investment Review.
The process of listing property on trading floors was also complicated, as was the transaction process, said Pham Thanh Hung, deputy director of Century Group.
The regulation that property must be announced and listed on the trading floor a week before transaction was only appropriate when the real estate market was booming, he said.
In a frozen market, the regulation would push up costs, he added. In addition, many real estate trading floors were not managed effectively, which would pose a risk to buyers. These trading floors took advantage of regulation loopholes to mobilise capital and transfer property illegally.
According to an expert from the real estate association, a large number of trading floors were established while the property market was booming, but not enough attention was paid to quality or management.
When the recession hit the market, many floors shut down without reporting the action to the construction department, making management difficult.
According to Nguyen Van Minh, deputy president of the Viet Nam Real Estate Association, only a few property trading floors conducted legitimately transparent operations.
As of the end of March, there were more than 1,010 trading floors throughout the country, mainly in Ha Noi and HCM City.
Out of over 500 trading floors in Ha Noi, more than 122 halted operations last year and 200 others did not have any successful transactions.
Starting in the third quarter, property trading floors will be required to report their operations once a month.
The laws on housing and real estate business were being amended to ensure appropriateness with the current reality, the ministry said.
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