Vietnam aims for transparency of realty market

VietNamNet Bridge – The Ministry of Finance (MoF) has announced that it is working to urgently complete a draft law on land and housing taxation that will impose progressive taxes on those who own large amounts of property, to be submitted to authorised agencies for approval in 2009.

Once approved, the law is expected to curb speculation of real estate resulting in a virtual “fever” that has gripped the domestic market in the past. It is also a move to help complete a legal framework for the real estate sector in order to create transparency and stability to aid the market’s sustainable development.
 
According to a report released at a financial conference on Dec. 3, the MoF admitted that the development of the Vietnamese real estate market has been somewhat spontaneous and unhealthy in the past and said that it will focus on amending the relevant legal documents to speed up the granting of land use rights certificates in an effort to increase the amount of commodities eligible for listing on the nation’s trading floors.
 
The ministry will encourage the use of land for construction purposes to encourage economic development and social welfare.
 
Furthermore, the public disclosure of the specific nature of land use and urban development plans, as well as projects calling for investment, is considered an indispensible matter to increase the transparency of the market. 
 
Since the beginning of this year, several large cities such as Hanoi and Ho Chi Minh City and their surrounding areas have experienced decreases in both prices and transaction volumes of real estate.
 
Unofficial statistics reveal that the prices of high-end apartments fell by between 20 and 30 percent compared to this time last year, while those of villas experienced a drop of 30 percent. Transactions were only completed for small apartments and houses costing less than 1 billion VND. 
 
The MoF attributed this standstill to the recent slump in international and domestic stock markets and the measures taken by the government to adopt tighter financial and credit policies for securities and real estate investment. 
 
In addition, the real estate market’s internal weaknesses, such as its spontaneous and unhealthy development and a shortage of low-cost housing, are other factors that have led to an imbalance in supply and demand in the market. The current real estate taxation system has failed to encourage the effective use of land or to limit market speculation. 

(Source: VNA)

Update from: http://english.vietnamnet.vn//biz/2008/12/817089/