The key factors limiting Vietnam’s real estate market are: a lack of transparency, access to funding and the legal framework. Heeding the lessons learned by Vietnam’s counterparts in the Asian property sector should advance the position of this emerging market. See the following article from Property Wire for more on this.
Improved legal and financial frameworks are needed if Vietnam’s emerging property market is to grow into a sustained real estate environment, it is claimed.
The country’s real estate sector will continue to grow and attract investors in 2010 but potential problems such as rapid urbanization, environmental pollution and supplying sufficient low cost housing needs to be addressed, a two day conference heard.
Tran Kim Chung from the Central Institute for Economic Management, part of the Ministry of Planning and Investment, said Viet Nam’s property market has recorded several achievements in recent years, contributing greatly to the country’s urbanization, improving urban landscapes and raising people’s living standards.
He told delegates at the conference in Ho Chi Minh City that the real estate market plays a crucial role in the country’s economy and its growth has attracted a great amount of investment capital. Its growth will elevate and stimulate other economic sectors, he said.
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But the conference heard that the domestic property market still suffers from several shortcomings, including a lack of legal framework for real estate investment, real estate bonds, secondary real estate mortgages and real estate saving funds.
Despite commercial banks regularly granting credit to customers, the market still needs more funding, Chung said.
He said another problem with the sector was the lack of transparency, as it mainly depended at present on sellers, with buyers sometimes not having enough information on their purchases.
Chung called for the law on property registration to be improved and said issues relating to property finance and property information should be examined. Training is also needed to make the sector more professional, he added.
Also attracting foreign investment is vital. ‘We will continue to gradually expand the range of foreign investors involved in the property market. This is one of the important tasks in attracting resources to the domestic property market,’ he claimed.
Developers support the drive for change. Le Chi Hieu, chairman and general director of Thu Duc Housing Development Corporation, said new policies are crucial for the real estate industry to move forward. ‘We need a stable and correct assessment of the real estate market and to concentrate more on developing suitable policies relating to the property sector and real estate trading,’ he said.
Alan Tong, former chairman of the International Real Estate Federation, said Vietnam could learn from other Asian real estate markets such as China and Singapore and avoid mistakes that they have made.
Though the transparency in legal and regulatory environment has greatly improved, more needs to be done to help the property sector more attractive, said Boaz Boon, vice president of CapitaLand Limited. He said investment performance measurements, availability of information on market and transaction processes needed to improve urgently.
‘We cannot expect the market to be transparent quickly but it should move to a semi-transparent phase soon and move further from there,’ he said.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.
