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Developers avoid property trading floors
The Ministry of Construction (MOC) has recommended that the Government allow real estate investors to sell a certain percentage of products outside trading floors.
Analysts estimate that up to 70 per cent of all real-estate projects are sold under capital contribution contracts.
Under the draft regulations, MOC proposed that investors be allowed to set aside 20 per cent of their products in real estate projects for strategic partners, without having to go through trading floors.
The ministry said the change would discourage investors from side-stepping the existing law.
According to current regulations, all real estate transactions must be carried out on trading floors.
Nguyen Manh Ha, director of the MOC's Housing and Real Estate Market Management Department, said that there were 226 real estate trading floors nationwide. However, in the first eight months of the year, only 3,500 transactions were carried out on trading floors, or 20 per cent of all transactions.
One of the "tricks" real estate developers use to sidetrack the law is to sell real estate under "capital contribution" contracts, which entails investors getting capital from buyers when the projects are still in the planning stage.
Analysts estimate that up to 70 per cent of all real-estate projects are sold under capital contribution contracts. However, Nguyen Tran Nam, deputy minister of construction, said the law did not prohibit investors from mobilising capital from potential buyers. He said that few investors would have enough money to implement projects if they did not mobilise capital from other sources, such as bank loans or future customers.
Nam also said that it was understandable and acceptable that real-estate investors reserve some products for strategic shareholders or important partners.
By side-stepping trading floors, Nam said it was easier for investors to mobilise the capital they needed to implement construction projects quickly.
Phan Thanh Mai, head of real estate trading floors in the northern region, said that the amended law should include fines for those who broke trading regulations.
VietNamNet, VietNamNews
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