Illustrative image. Photo: horea.org.vn
Ho Chi Minh City Real Estate Association sends development proposal to city's People's Committee.
The Ho Chi Minh City Real Estate Association (HoREA) has sent a proposal for the development of the city’s real estate market in the 2017-2020 period to the city’s People’s Committee.
Nine solutions have been put forward. Firstly, HoREA proposes the National Assembly approve the draft “Law Amending and Supplementing a Number of Articles of the Law on Investment and Business” to effectively adjust the economy and the real estate market. It will also create a transparent business environment and build and develop a transparent and sustainable real estate market.
Second is to reform administrative procedures in a simple, transparent, open and fast manner.
Third is about tax policy. To encourage market growth, a lower tax rate should be applied to income from transferring real estate. To properly regulate when the market shows signs of a bubble appearing, higher rates can then be applied. To encourage investment in and the development of social housing, the government has applied a 5 per cent value added tax rate and a 10 per cent of corporate income tax rate.
Fourth relates to credit tools. In order to encourage market growth, HoREA proposes applying policies to loosen credit and cut interest rates. When the market shows signs of a bubble appearing, credit restrictions can then be applied, including credit tightening, high interest rates, stricter loan policies, and credit growth control. HoREA said that credit policy is becoming an effective tool to regulate the real estate market.
The association also proposed the State Bank of Vietnam (SBV) direct commercial banks to develop internal operating regulations to encourage developers, contractors, consultants, and customers to open accounts. These would facilitate banks in monitoring cash flows for the right purpose, help investors and stakeholders to effectively use credit, and minimize risks for customers.
Fifth is regarding planning tools, including land use planning, construction planning, urban development planning, and housing project planning. In order to encourage market growth, HoREA proposes the State approve an increased supply of land funds to the market and bolster policies for investing in real estate projects. When the market shows signs of bubble appearing, policies restricting the supply of land to the market can then be applied, with limits on the approval of real estate investment projects.
Sixth is that the government apply risk control tools in the real estate market. Such measures are aimed at protecting consumers and building a transparent and sustainable real estate market.
Seventh is implementing a coordination mechanism for developers, contractors, suppliers, banks, and the government.
Eighth is implementing a socialization mechanism for investment in the form of land exchanges with infrastructure, through build-transfer (BT) and public-private partnership (PPP) projects.
Finally, HoREA proposed developing social housing, affordable housing, and cheap commercial housing. This is the foundation for the development of the city’s real estate market.