Former Deputy Minister of Natural Resource and Environment Đặng Hùng Võ. Photo sggp.org.vn

 Former Deputy Minister of Natural Resource and Environment Đặng Hùng Võ talks to Sài gòn Giải phóng (Liberated Sài Gòn) newspaper about soaring demand for land

What are the main reasons leading to the 'land fever' in Việt Nam?

The first reason that should be mentioned is the deep drop of construction projects in many localities – particularly in Hà Nội and HCM City. According to a recent report, the number of approved projects has dropped by 10 times in these two cities.

Theoretically, by the year 2024, the number of approved construction projects will have declined by 10 times against projects which were approved in the last few years. So the drop of construction projects should happen in at least three years. Yet now, some real estate brokers have already accumulated land in a bid to make big profits in the near future.

For example, when HCM City authorities publicised a plan to create Thủ Đức City within HCM City and the construction of some high-speed roads, the price of real estate skyrocketed. Of course, this will impact real estate prices in other localities nationwide.

Some people have attributed land fever to rumours spread by land brokers, do you agree?

Of course, land brokers have always wanted to manipulate the real estate market to make money from it. As a result, many real estate investors who lack good knowledge have fallen into their traps. This is an issue that authorities should take action on immediately to ensure law and order in the real estate market.

What actions or real estate tools should the authorities employ?

In many countries, their authorities have developed strong legal corridors to curtail negative impacts from illegal land brokers. For example, authorities should tax all land transactions. When a new land plan is released to the public by local authorities, landowners should have to pay land tax in accordance with the new rate. However, in Việt Nam right now we cannot apply such a policy. This is food for thought for Vietnamese authorities.

Which Vietnamese agencies should be accountable to make changes in the land law?

In my opinion, the Ministry of Natural Resources and Environment (MONRE) should be the first agency to revise the Land Law. In 2016, the Government ordered the MONRE to revise the Land Law to make it synchronise with other laws. However, to my knowledge, the new Land Law will only be available in 2023.

However, from the side of the Ministry of Construction, since the year 2015 when the Housing Law came into force, it has not been able to create an official real estate information system. This has become a big problem as Việt Nam lacks full information about the real estate demand or transactions in the market.

What is the responsibility of local authorities?

I’m sorry to say real estate management in almost all local governments nationwide is very poor. Worse still, quite a few local authorities have not been responsible and some even have lent their land to illegal land brokers. It’s high time to bring the land law back to order!

What should we do to revamp the real estate market?

First of all, concerned authorities should temporarily stop any action to convert agricultural land into land for other purposes. In addition, State banks should order all commercial banks nationwide not to provide credit to real estate companies – a very important tool to prevent a bubble in the real estate market. In the meantime, all local authorities nationwide should strictly abide by the Land Law, particularly Decree 145/2020 on how to implement the Land Law to speed up the process of approving a real estate investment project­. VNS