Real estate market will face many new laws in 2021

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Mr. Le Hoang Chau, Chairman of Ho Chi Minh City Real Estate Association (HoREA).

The real estate business activities in the country resumedin the last months of the year with many strong signs of recovery thanks to a series of new policies directly supporting the market. How do you evaluate this expectation?

Currently, the Government has issued many policies to remove difficulties and problems for real estate businesses. This can be the basis for real estate supply to recover.

These include the Law on Investment 2020, Construction Law (amended) 2020, Law on Investment in the form of Public-Private Partnership (PPP), incorporating amendments to a number of articles of the Housing Law, Real Estate Business Law, Law on Environmental Protection, effective from January 1, 2021, Decree 25/2020/ND-CP regulating a number of articles of the Bidding Law regarding investor selection and Circulars on development of various types of real estate.

In particular, Decree 148/2020/ND-CP amending and supplementing a number of decrees detailing the implementation of the Land Law will take effect February 8, 2021, in which, the content of solving problems for thousands of projects with intercropped land (land directly managed by the State), which is expected to facilitate the management of ministries, branches, localities, as well as people in the construction of works.

At the same time, the investor can remove "bottlenecks" in the approval of residential projects and shortening the time for construction permits will create conditions for the real estate market to develop strongly in 2021 and following years.

Thousands of real estate projects have been unable to be implemented due to the problem of public land intermingled in the projects. When Decree 148 comes into effect in February, how will these problems be solved for the real estate business community?

According to HoREA statistics, in the past five years, Ho Chi Minh City alone has had more than 100 housing projects that cannot be implemented due to public land problems. However, fromFebruary, Decree 148 stipulates that if the public land plots are eligible to be split, the land will be auctioned within 90 days from the date of issuance of the decision on land acquisition. If the land cannot be split, the State will permit the allocation or lease of land. In addition to resolving the public land issue, Decree 148 also removes bottlenecks for projects with land that cannot be transferred.

Regardingsocial housing projects, private enterprises that have invested their own capital to create a land fund and implement the project still have problems with procedures for land allocation, land lease and construction. Removing this problem, Decree 148 stipulates that projects with preferential investment incentives are generally allocated or leased land without going through auction of land use rights or bidding for projects using land.

In addition to the improvement of the legal system, how do real estate corporations and enterprises need to change in 2021 to create a transparent, fair and healthy business environment?

Currently, the biggest difficulty of the real estate market is the imbalance between supply and demand while the demand is too high, pushinghouse prices up.

In particular, there is a lack of commercial housing with affordable prices and social housing. Accordingly, the association proposes real estate corporations and businesses consider increasing the proportion of investments in affordable housing, low-priced commercial housing, and social housing. Despite the low profit, high liquidity and low risk, contributing to the State in settling housing for civil servants, cadres, armed forces, middle-income earners, and urban low earners, labor workers, students and immigrants.

In addition, real estate corporations and businesses should work together to control house prices, prevent house prices from rising, virtual increases occurring in 2021, on the basis of determining “profits expectation"at a reasonable level, to "share"investment efficiency with customers and thecommunity.

Thank you Sir!