|Illustrative photo. (Source: Vietnam Economic Times)
Vietnam Economic Times quoted comments by the Vietnam Real Estate Association as saying that the real estate market has been stagnant as localities have intensified the inspection of real estate projects and the control of credit flows into the sector has been tightened.
Nguyen Quoc Hiep, Chairman of the real estate company GP Invest, blamed administrative red tape and new regulations for the standstill facing the sector.
“We had completed procedures for our project in accordance with previous regulations, but our efforts were in vain as the Land Law 2014 accompanied by new rules came into force. The current regulations required for real estate projects are extremely challenging to firms,” Hiep claimed. He underpinned his view by preliminary statistics that Hanoi had only six commercial housing projects approved during the first half of 2019.
Nguyen Ngoc Thanh, Chairman of the Haiphong city Real Estate Association, complained that he had taken three years to finalize procedures in relation to adjustments to the planning of a project. While the dossiers were submitted to competent agencies, an official in charge of receiving such procedures was reportedly joining a refresher course and no one was assigned to assume the responsibility.
Capricious inspections of real estate projects have broken out following the official finished the training course. This has incidentally extended the time for adopting the adjustments.
There is no consistency of the laws and regulations related to real estate, subsequently deferring the implementation of investment procedures, Thanh noted.
He explained that the Law on Investment prescribes that in order to become the investor of a real estate project, firms must have the project okayed by competent agencies whilst investors must gain approval for the planning of their project if they want their project to be approved. As a result, a number of investors have finalized preparations for real estate projects but their planning has yet to be ratified due to the administrative overlaps.
Le Hoang Chau, Chairman of the HCM City Real Estate Association (HoREA) said there exist considerable overlaps between the Law on Urban Planning and the Law on Investment regarding the detailed planning and in-principle investment approval of real estate projects.
To overcome these barriers, HoREA called upon the HCM City People’s Committee to assign the Department of Planning and Architecture to receive and handle project documents on detailed planning with the 1/500 scale proposed by investors.
Meanwhile, the Department of Finance and the Department of Natural Resources and Environment should complete the process and administrative procedures related to calculating land use fees for commercial housing projects, in order to save time and increase State budget collection.
In fact, only three commercial housing projects were submitted by the HCM City Department of Construction to the municipal committee for granting investment permits during the first half of this year, representing 16 projects lower than the figure approved in the corresponding period last year, or an annual drop of 84.2 per cent.
The construction department has also sent a list of 10 new commercial housing projects to the municipal committee for approval, dropping by 46 projects or 82.2 per cent on year. Besides, only 24 valid housing projects have been allowed to make debut in the time ahead, plunging by 29.4 per cent on year.
More importantly, there were no affordable housing projects launched to the market during the second quarter of this year. In short, HCM City’s real estate market saw slumps in the first seven months of the year, causing many adverse impacts on other economic sectors.
A large number of real estate developers have been at a complete standstill while some are on the edge of bankruptcy, Chau stressed.
Nguyen Van Dinh, General Secretary of the Vietnam Association of Realtors (VARS), asserted that complicated procedures have been hindering the progress of launching new real restate projects while giving a threat to the balance of supply and demand.
Administrative red tape would also increase time and costs for the implementation of real estate projects, hence making negative impacts on investors’confidence.