|
More transparency for real estate market
Real estate investors are allowed to mobilize capital and sell a certain proportion of their products unlisted on the trading floor as of August 8 when a government decree that guides the implementation of the Housing Law took effect.
Deputy Minister of Construction Nguyen Tran Nam says the new decree has introduced stipulations to minimize risks in the real estate market and encourage healthier growth in the sector.
Reporter: What are the differences between the 71/2010/ND-CP decree and the previous 90/2006/ND-CP decree?
Deputy Minister Nam: There are several differences. First, from the real estate finance perspective, the investor now can mobilize capital through enterprise bonds as stipulated and also through non-banking institutions such as financial companies and investment funds. Of course, he can also take out loans from banks on the condition that he will not prioritize products.
Second, a primary investor in urban areas can transfer part of his project with its infrastructure to a secondary investor when the site-clearance project finishes.
Third, the investor in a real estate project can mobilize capital from individuals or groups to build houses and divide profits or products according to agreements or shares, but the rate of this transaction cannot exceed 20 percent of the total products of each subproject.
Reporter: That means businesses are allowed to freely mobilize capital after a project takes shape?
Deputy Minister Nam: Real estate-related laws govern the time of mobilizing capital. Specifically, the investor must prove the legality of his project, which must be approved later, and the project’s site clearance and compensation must be completed. The 71 decree is more detailed and concrete than the 90 decree regarding the forms of capital mobilization, but makes no difference in terms of schedule. Businesses must ensure their ability to implement their projects.
Reporter: Recently, a large number of projects have mobilized capital even when they have not finished the site clearance or legal procedures. So when the 71 decree took effect, how were the contracts of these businesses to be viewed?
Deputy Minister Nam: Capital mobilization contracts signed before the 71 decree took effect are void. I recommend customers check the legal papers and the capacity of the investor before signing contracts even if they have an urgent need for housing.
Reporter: What are the reasons for permitting the investor to sell 20 percent of his products?
Deputy Minister Nam: This stipulation takes into account the fact that companies can mobilize capital from individuals and organizations with the capacity to alleviate their financial burdens.
The 20 percent limit aims to prevent possible speculation when the projects have not met sufficient conditions to be completed.
Reporter: Many say that even without this 20 percent provision, there are already transactions under the counter. Have you considered this phenomenon?
Deputy Minister Nam: Private transactions in the real estate market are still occurring while managing agencies are striving to closely control them. We are drawing up a circular that guides the implementation of this decree. We have consulted the Ministry of Finance, the Ministry of Natural Resources and the Environment, and the General Department of Taxation to create detailed and strict procedures.
Only after investors fulfil their financial obligations can they grant certificates to each customer and be listed on the floor.
vov
|
