|
Impractical to use economic to control RE market: Expert
Prof Dang Hung Vo, a senior real estate expert, former Deputy Minister of Natural Resources and the Environment, affirmed that a real estate group should not be assigned the task of stabilising the real estate (RE) market.
Prof Vo, in an interview given to local newspaper VNExpress, stressed that it is impractical to expect a newly set up real estate group to help control the real estate market, adding that this would be contrary to market rules.
Vo made the comment after the Government initiated the establishment of the real estate group and assigned the Ministry of Construction to implement the idea.
Regarding the establishment of the real estate group, the first of its kind in Vietnam, the idea was put forward two years ago by the Ministry of Construction. Under the plan submitted by the ministry, a state-owned real estate corporation which is well-known in the field would be the nucleus of the group. The authors believe that the group would regulate the real estate market and help make it more transparent.
Vo said that while it is necessary to have a large real estate group in Vietnam, people should not have too much hope the group could stabilise the market.
Vo said:
"The establishment of big groups specialising in real estate and construction was mentioned when the Government began setting up other economic groups. In the context of Vietnam’s deeper integration into the world, when Vietnam has to open its real estate market’s doors to foreign investors, the operations of big groups benefit Vietnam. If Vietnam only had small-scale real estate companies, we would be inferior to big economic groups which are flocking to Vietnam.
Moreover, if we have big economic groups, this would help increase supply for the market. Small-scale real estate companies are only developing small projects. However, with the current urban development tendency, we need big groups".
VNExpress: What about the other side of big real estate groups?
Dang Hung Vo: Of course, there are two sides to the coin. Besides the benefits that I mentioned before, the establishment of the real estate group would create disadvantages for small- and medium-size enterprises in Vietnam, or would hinder the call for investment from the non-state economic sector into the real estate field.
Therefore, in order to take full advantage of the advantages and minimise disadvantages of the establishment of the real estate group, we need to set up a perfect legal framework which regulates the market, where big groups have their own pieces and small companies also have their own works.
VNExpress: What would you say about the role of ‘stabilising the market’ that the Ministry of Construction has assigned to the real estate group?
Dang Hung Vo: I can say for sure that it is impossible to assign the role of stabilising and regulating the market to any business. The function of regulating the market must be undertaken by government agencies which have tools to do that like policies, programming and tax.
It would be a blunder if we assign a real estate group, a business, to come forward and regulate the market.
I have to remind you that in a market economy, businesses do not have the function of regulating the market, because the principal goal of businesses is profit.
As you may know, Vietnam has economic groups which hold monopolies in their fields like electricity and oil and gas. However, the state does not expect the groups to stabilise the market; it still holds the power of controlling the market through reasonable mechanisms.
VNExpress: How about the goal of heightening transparency and controlling the market to prevent price fevers?
Dang Hung Vo: I don’t believe that big real estate groups can undertake this role either. I have to repeat that only the state with its policies, programming, tax schemes and administrative procedures can do that.
We cannot rely on the ‘kindness’ of the heads of economic groups to settle the problems of the real estate market.
VietNamNet, VNE
|
