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Inflation hits retail prices
Selling prices of houses and apartments should be adjusted in line with fluctuations in the nation's consumer price index (CPI), according to Bui Tien Hung, Deputy General Director of Viet Hung Urban Development and Investment Joint Stock Company.
Bui Tien Hung said his company wanted to apply a fluctuating price that could see buyers have to shell out more money if the CPI rises dramatically. That meant prices determined at the time of registration with sellers, could fall or rise after contracts are signed.
Hung said his company was still considering the best way to apply the pricing process.
"Selling prices for apartments would be determined at the time of registration with sellers and there subsequent payments would be adjusted in accordance with fluctuation in the CPI," said Hung.
"In addition, our company will use a certain threshold to protect the interests for customers. This threshold will be agreed by the seller and buyer."
Hung said the proposal aimed to provide more security for sellers.
Senior Land Adviser Dang Hung Vo said using CPI to calculate housing prices was a good idea. "In the context of rising prices, this approach could avoid the devaluation of the Viet Nam dong," he said.
"Today, prices rise and fall and this is reflected in the CPI. In this way, property would also fluctuate against a collective ratio."
Using US dollar or gold as a payment calculation or reference price for property is problematic, said Vo. Recently, some businesses were found to be violating the Ordinance on Foreign Exchange. High value products such as real estate, if paid in Vietnamese dong, leave investors open to huge losses in the context of high inflation.
"Each real estate construction project lasts between 3 to 4 years or even longer, if prices rise by between 15 to 17 per cent, investors will suffer great losses," Vo said.
Dang Van Quang, Director of Navigat consulting firm, said selling or buying houses was risky.
"To limit risk, investors must be linked to an index or certain things that can be quantified," he said. "Even though housing sales are referenced, adjusted in line with the US dollar, gold or CPI, they are estimates only."
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