Credit supply
at affordable lending rates is considered a necessary measure to
stimulate the property market, but beyond capital supply, the market
also needs a liberal environment with improper regulations removed,
experts said.
While housing products being developed can easily change hands, trade
of completed apartments is being restricted by current regulations.
Property developers have been complaining about Circular
16/2010/TT-BXD providing guidelines for Decree 71/2010/ND-CP, which
allows buyers of unfinished housing products to freely transfer their
properties to other parties, while those already receiving completed
houses find it difficult to do so.
Once the properties were handed over to them, buyers need home
ownership certificates so that their apartments can change hands. The
point is it often takes a couple of years for homeowners to get such
certificates.
“Homebuyers are not to blame for late home ownership certificate
granting. The responsibility falls on property developers and the State
agencies,” said Le Hoang Chau, chairman of the HCMC Real Estate
Association (HoREA).
The fact that the property transfer is restricted goes against
property rights of citizens, damaging the interests of homeowners and
secondary investors in need of housing transfer, as well as affecting
the market liquidity.
Sharing this view, Nguyen Phung Thieu, general director of Saigon-Gia
Dinh Real Estate JSC, said such a policy is unreasonable and should be
removed soon, in order to enable apartments to change hands with no need
to have home ownership certificates.
Relieving burden on input
Housing prices are now too high compared to people’s incomes. Apart
from speculation, difficulties in project development are also ascribed
to exorbitant property prices.
Property product prices are dependent on many factors, especially
site clearance cost, land use fee, capital cost, material expenses, and
possibly high management cost caused by prolonged administrative
procedures.
At a recent seminar held by HoREA, Nguyen Xuan Quang, general
director of Nam Long Investment Corporation, shared his experience of
being tortured by cumbersome procedures.
In 2008, Nam Long cooperated with a foreign partner to carry out a
project. After signing the contract, the two parties conducted
regulatory procedures such as seeking approval for project planning and
applying for an investment certificate.
The procedures were expected to last one year, but in fact, it took
three years for the project owners to complete all the procedures.
When the partner decided to join in the project, the local realty
market was thriving. However, as the market worsens, the foreign
investor has pulled out of the project, leaving his company with huge
expenses and the possibility of project revocation due to slow
deployment, Quang stressed.
Another headache is land use fee calculated on market prices under
Decree 69. With this calculation, property developers have to pay both
site clearance compensation and land use fee in accordance with the
market prices, meaning double land purchase.
Therefore, many real estate enterprises are afraid of executing their
projects. As a result, the market comes to a deadlock and tax agencies
have difficulty collecting land use fee.
Property firms said land use fee would end up pushing up home prices, and homebuyers will suffer.
SGT