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Property transactions through centres still wanting legal foundation
Real estate companies will have to conduct property transactions through real estate trading centres. Associate Prof Dr Hoang Van Cuong, Dean of the Real Estate Faculty under Hanoi Economics University, talks about this.
What do you think state management agencies expect in requiring property transactions to be carried out through trading floors?
In recent years, a lot of real estate projects have been approved, but those who have real demand for accommodations still cannot purchase apartments directly from investors. They have to do this through a lot of intermediaries.
State management agencies hope that the transactions through trading floors will help prevent speculation, which pushes prices high up on the market. The trading floors will also help make transactions more transparent and prevent a ‘virtual’ shortage in the market. Besides, this will help stop tax evasion by parties in trade deals.
What is the biggest difference between real estate trading floor and gold and securities trading floors?
On gold and securities trading floors, purchase and sale orders must be matched to determine the prices and volumes of transactions. As for real estate trading floors, commodities and sale prices must be made public.
Under the circular by the Ministry of Construction, information must be made public at least one week before transactions.
Do you think the trading floors will be able to help settle the speculation?
Those who have a lot of money will still be able to purchase a lot of commodities and speculate. However, the speculation will be more transparent.
Property transaction through trading floors remains a new issue in Vietnam. However, the number of real estate trading floors proves to be relatively big. Do you think that it is because of the overly simple procedures required for trading floor establishment?
When drafting regulations, some experts suggested that strict regulations should be set up in order to ensure the professionalism of trading floors. However, too strict regulations would lead to few trading floors being established, which would not have been good for competition.
Some real estate firms have opened real estate floors to sell their commodities. Do you think that this is a kind of ‘playing football and setting the rules of the game at the same time’?
This does not come contrary to the current regulations. However, these trading floors will not have high professionalism, and they will have to shut down if no other real estate project can be found.
A foreign-invested company has got approval in principle to establish a real estate trading floor. What would you say about this?
Foreign real estate traders are allowed to set up trading floors in Vietnam. In fact, they are all experienced long-term investors, who can give reliable information. Clients always want to buy commodities from prestigious suppliers.
So, do you think that there is nothing to worry about with the real estate trading floors?
Legal documents say that real estate companies must carry out transactions through trading floors by 2009. However, there are no concrete sanctions regarding violators who do not make transactions through trading floors.
Under the draft document compiled by the Ministry of Construction, the biggest fine is VND500mil, which I think is not high enough to deter violators, because the sum proves to be not big if compared to real estate projects.
Besides, local construction departments still do not have divisions responsible for managing the operations of real estate trading floors.
VNN
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