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City to reform property market

Update: September, 13/2012 - 09:58

HCM CITY (VNS)— HCM City has unveiled plans to thoroughly restructure the real estate market to resolve outstanding problems and ensure sustainable development in future.

The Department of Construction is calling for experts' opinions to develop the plans.

Analysts have said that the property market faces problems like unplanned and unsustainable development that have to be addressed if it is to develop.

Nguyen Xuan Thanh, Public Policy Manager at the Fulbright Economics Teaching Programme, told the department at a recent meeting that the city should collect property tax, pointing out that, globally, development of the market is based on the tax.

The tax revenue could be used by the city to invest in infrastructure and real estate projects, he added.

Other analysts pointed out that though Viet Nam was a poor country many people wanted to have their own houses. But world-wide, people in major cities lived in rental houses, and the city should thus focus on building public housing and encouraging people to live in them, they added.

Le Hoang Chau, chairman of the HCM City Real Estate Association, said in the absence of comprehensive studies of the city's real estate market, the demand and supply situation was not clearly known, and this resulted in an imbalance and instability.

Clearly, the market had excessive supply because the city had thousands of property projects in addition to those in neighbouring provinces, he said.

But he said the market lacked two highly popular products: rental apartments at around VND2 million (US$90) per month for low-income State employees and apartments sold with 20- to 30-year payment terms.

So the city first needed to carefully study the market before making restructuring plans, he added. — VNS

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