Greater transparency needed in Vietnam’s property market

Tuesday, 2018-04-17 04:05:50
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New projects are booming in Phu Quoc. (Image: Zing)
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NDO - A land fever has recently gripped a number of Vietnamese provinces where the special economic zones of Van Dong, Bac Van Phong, and Phu Quoc are being planned, driving prices sky high by three to four times overnight.

The land and housing information in these areas has become distorted without a clear line between what is real and what is fake.

In the past, the public have also been concerned when land near the site of the planned Long Thanh Airport in Dong Nai province was reportedly being amassed by hoarders.

And a recent land frenzy on the outskirts of Ho Chi Minh City caused some chaos to the city’s property market which had been following a stable trend.

The type of investment based on ambiguous information and manipulative tricks to create an imagined fever so as to court inexperienced buyers should be condemned and requires an investigation by the authorities if the market is to be stabilised.

Compared with developed economies, the transparency of Vietnam’s property market is fairly low. The market is highly susceptible to any new information, even when it has not been verified.

Many local authorities have failed to communicate factual information on the property market and impose strict sanctions on those who spread malicious rumour.

Such loopholes have been exploited by profiteers who have fabricated information to make profits while the resulting losses will be incurred by secondary investors, which does great harm to the development of the property market.

In order to stabilise the market, the Ministry of Construction has asked the provincial authorities of Quang Ninh, Khanh Hoa, and Kien Giang where the three special economic zones are being planned, to carry out inspections and identify the reasons behind market volatility.

The provinces have been asked to strictly punish violations of applicable land and property laws within their jurisdiction while promptly providing information on local housing and urbanisation plans.

In the long term, it is necessary to speed up the creation of a nationwide database on the property market in an open, transparent, and standardised fashion. At the same time, efforts are needed to rein in the property brokerage business.

More importantly, people should be cautious and exercise due diligence regarding the projects they plan to invest in to avoid being manipulated by dishonest brokers.