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| New decree makes property market more transparent |
| 20-JUL-2010 Intellasia | The Saigon Times Weekly |
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| 20 Jul, 2010 - 7:00:00 AM |
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New rules in the new Decree 71/2010/ND-CP offering guidelines for the Housing Law are expected to help make the property market more transparent, but the decree also poses a challenge for short-term investors, especially. those engaging in the land plot segment.
The new decree, which will come into effect on August 8 this year, allows housing developers to sell in advance a maximum 20 percent of the total number of apartments in a property project to raise cash from individuals and organisations.
This means they will be able to sell their products before finishing building foundations without violating the current regulations. The remaining housing products can only be launched into the market until the building foundation is finished, and those products must be traded via property exchange floors.
However, the new decree does not allow investors to transfer their capital contribution contracts to others before the foundation is finished, and it also requires that developers only sell finished housing products apart from the 20 percent.
Tran Minh Hoang, board chair of Vinaland Invest Corporation, said that allowing housing developers to mobilise capital from secondary investors will create a chance for property developers in need of funds to finish their building foundations. They can sign capital contribution or investment cooperation contracts with potential homebuyers to mobilise funds besides tapping other financial channels such as banks and bond issues.
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