10 recommendations to break legal issues in the real estate market

10 recommendations to break legal issues in the real estate market in Vietnam

At the seminar on the topic “Prospects of the real estate market in 2021”, Associate Professor Tran Kim Chung, Deputy Director of the Central Institute for Economic Management, emphasized that the year 2021 will mark the development of Urban real estate in urban areas, in which, real estate living space is still the number one choice of home buyers today.

According to Mr. Tran Kim Chung, integrated real estate in urban areas will have a chance to grow strongly in the coming time as buyers increasingly focus on living facilities over living areas.

Seminar on the prospects of real estate market in 2021. Picture: vnexpress

In the period from 2011-2012, the demand for real estate is only at a basic level. That means that the investors only interest in the small house area, which does not have too much value. From 2018 onwards, the buyer’s demand for real estate ownership focuses on many external utility factors.

Mr. Chung pointed out 4 real estate trends that homebuyers are aiming for, which are: 

  1. Living utilities are more important than living areas.
  2. The facade width is more important than the accommodation length to the center length; 
  3. The neighbor’s lifestyle is more important than the equipment and furniture in the homebuyer’s own house.
  4. Rural urbanization is more appropriate than ruralization. 

“For home buyers today, living space is still the number one choice. This is a trend leading the real estate market in the near future”, Mr. Chung emphasized.

Problems encountered when buying real estate properties

This expert said that living utilities in urban projects are deciding most of the buyer’s choice when considering buying real estate. For example, in 2 real estates with the same money, buyers are willing to choose places with better living facilities. Also, when considering buying a land with the same money, instead of buying a large land with no utilities, buyers will choose a smaller villa with fully integrated amenities.

Although the real estate market has the foundations and potentials for development, according to most industry experts, the biggest problem of the current market is the legal problems. For the real estate market to develop sustainably, according to experts, it is necessary to remove relevant legal policies, creating momentum for real estate to have the opportunity to recover and develop.

Mr. Tran Kim Chung has given 10 recommendations related to the removal of legal problems to develop the real estate market:

  1. There must be official policy documents for the type of real estate, like a condotel or offietel. 
  2. Fully implement the amendment and supplement of Clause 3, Article 8 of Decree 20 on real estate tax law. Taxation with transactions and loans in the system was fixed but not yet done smoothly.
  3. Eliminate the shortcomings in the land accumulation policy. There is a provision in the Law that agricultural land is transferred to local people, this is a major limitation to land accumulation and development of the real estate market.
  4. It is necessary to consistently increase credit for real estate, reduce the reserve rate from 250% to 200%, even 100%.
  5. It is necessary to issue resolutions of local governments which will strengthen approval of real estate investment projects.
  6. Increase and steadfastly disburse public investment to promote infrastructure and trade.
  7. Mobilize infrastructure corridor auctions to get capital for infrastructure construction. This is an effective policy for the real estate market.
  8. Increased approval of the ongoing plans for the local planning areas. Therefore, we need a planning approval research strategy. If there is no plan, it will not be possible to implement the project in the plan.
  9. Mobilize all resources to develop low-priced housing, creating a foundation for the real estate market.
  10. Strengthen all capacities of investors. Local authorities should invite big investors into the market. It will be a boost to the economic development in general, real estate in particular.

ASL LAW is the top tier Real Estate law firm in Vietnam for. If you need any advice, please contact us for further information or collaboration.

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