Calls for new property investment law

A view of HCM City.Real estate associations have proposed amending the Law on Land and the Law on Trading Real Estate to create favourable conditions for investors in property investment.-Photo dinhgianhadat.vn

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 had many stages. The transfer of a project was an activity among investors but selling apartments to home buyers was not.

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

Phan Xuan Can, chairman of Soho Viet Nam Real Estate Joint Stock Company, said at present, activities transferring property projects were being implemented according to the 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 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 was approved, this would be great for transferring property projects, Can said. This would 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 Viet Nam 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 Viet Nam 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.

Transparency

In other developments, JLL Việt Nam, a foreign property service provider, reported that Viet Nam'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, Việt Nam 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. In 2014, Việt Nam was classified as a country with low-transparency and in 2016 the country is considered "on the cusp of semi-transparent".

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 $150 million Viet Nam improved 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 would help speed up reforming the land monitoring processes, investment procedures as well as providing project information that would enhance the investment climate, she said.