|An urban area in the west of Ha Noi. The role and responsibility of management offices must be enhanced to better manage the real estate market, according to a Prime Ministerial directive. — VNA/VNS Photo Huy Hung
HA NOI — The Prime Minister has pushed to enhance the role and responsibility of management offices in real estate investment and trading to spark growth in the domestic property market.
According to Directive No 2196/CT-TTg issued on Tuesday, the Ministry of Construction must join with ministries and sectors involved in the real estate sector to perfect the housing and real estate trading legal system and property management products including commercial and social housing and housing in low-income urban areas.
Cities and provinces with key property projects will join with the construction ministry and any ministry to the property industry to investigate property projects and report any issues to the Prime Minister in the first quarter next year.
The construction ministry will promote programmes focused on building houses for students, workers in industrial zones and low-income people in urban areas as well as programmes supporting housing for people in rural areas.
Prime Minister Nguyen Tan Dung has ordered the construction ministry to submit plans for developing houses for lease, including social housing and saving funds for housing developments to the Government in the first quarter next year.
Dung entrusted the Ministry of Finance to study, propose and report to the Government in the second quarter of next year regarding property tax in order to reduce speculation and oversee the property use of land and property products and adjust regulations on personal income tax for property trading activities.
The finance ministry will finish the decree on implementing added regulations of the Securities Law which includes property capital raised in the securities market.
The State Bank of Viet Nam (SBV) will also direct commercial banks and credit organisations to ensure a reasonable amount of capital will flow into the property sector according to the general policy on credit management.
The SBV will work with the construction ministry to help credit organisations implement credit policies and activities in restructuring the property market; directing credit organisations to allow investment loans for development projects for sale and lease serving low-income people, workers in industrial zones.
Initially, the banks will limit loans for compensation, site clearance, new projects and luxury property projects and loans for individuals trading property products.
The directive pointed out the SBV must work with the construction ministry to check and continue giving loans for property projects that are nearly finished or able to sell in 2012.
The SBV will continue to check and supervise the provision of property loans and dealing with bad debt.
Dung also asked provincial people’s committees and cities at the central level to check house development projects to achieve cohesive development of social and technical infrastructure and reasonable schedules for large scale developments.
Authorities will withdraw investment licences from projects that do not meet their schedules or are developed too slowly.
Relevant offices will promote property market management and solve obstacles restricting property investment and trade activities to support transparency in the industry.
In recent years, the domestic real estate market has attracted large amounts of capital from domestic and foreign investors and has boosted development, and the legal system has created a favourable environment for the property market.
However, the property market suffers from instability and a lack of transparency, with high prices and complicated development, which is what the government aims to change with these new regulations, while improving housing for low-income groups.
Speculation and prices for property products have increased while trading activities have reduced.
Nguyen Manh Ha, director of House and Real Estate Market Management Department under the construction ministry, said investment in the property sector has not been based on market demand and the market has lacked development plans, which has created a waste of capital and land.
Property market capital has come largely from banks and individuals, while the country does not have medium or long-term credit sources for enterprises and people to invest in, according to Nguyen Minh Ngoc, deputy head of the National University of Economy’s Real Estate and Resource Economy Department.—VNS