Calls for new property investment law

Le Hoang Chau, chairman of HCM City Real Estate Association (HoREA), said the association proposed amending the two laws to permit enterprises to sell full or part of a property project after finishing site clearance for the project. The laws should consider the transfer as normal activities in the process of investing and trading property projects.

Chau said investing in a real estate project has many stages. The transfer of a project is an activity among investors but selling apartments to home buyers is not.

If investors selling projects do not complete administrative procedures or stages of investment, the investors buying the projects will complete those works, he said.

Phan Xuan Can, chairman of Soho Vietnam Real Estate Joint Stock Company, said at present, activities transferring property projects were being implemented according to Decree 76/2015/NĐ-CP and some regulations of the Law on Trading Real Estate 2014.

Under the regulations, the transferred part or full project must have a detailed plan at a scale of 1:500 or approved master plan, complete compensation and site clearance, and have land use certificate for the transferred part or full project.

If the proposal is approved, this will be great for transferring property projects, Can said. This will open opportunities in transferring projects that have approved investment plans but have not finished site clearance. New investors could finish the project instead of the State giving the project to other investors.

In addition, total value of transferring activities for property projects was expected to exceed the figure of US$5 billion in 2015, Can said.

The Vietnam Chamber of Commerce and Industry (VCCI) also proposed the Government abolish Article 171 of the Law on Housing about approving investment plans for project building.

Tran Ngoc Quang, general secretary of Vietnam Real Estate Association, said the association supported the proposals from the HoREA and the VCCI and proposed the Government and National Assembly amend some regulations in the Law on Land 2013 to create transparency in land allocation and lease of land.

In other developments, JLL Vietnam, a foreign property service provider, reported that Vietnam’s real estate market transparency improved but more efforts were needed.

Trang Le, Manager, Research and Consulting, JLL Vietnam said according to JLL’s 2016 GRETI report, Vietnam is classified as a country with low-transparency (ranked 68 out of 109 countries).

However, the market has shown signs of improvement during the past two years. From a country with low-transparency in 2014, the country is considered “on the cusp of semi-transparent” in 2016.

Improvement in the real estate market was seen in various aspects, from clearer provincial planning information, investment procedures and better project information provided to buyers and tenants, Trang said.

According to the World Bank, despite improvement in land information disclosure, Vietnam must improve further. In July 2015, the World Bank approved the US$150 million for Vietnam to improve a land governance and database project. The project will develop an information system and land database and make it available to both the Government and the public.

This credit package will help speed up reforming the land monitoring processes, investment procedures as well as providing project information that will enhance the investment climate, she said.

Project information transparency has improved in the residential market. In recent years, numerous transparency regulations has been implemented. "However, there is still a lack of concrete regulations to ensure the accuracy of disclosed information," she said.