Real estate prices are expensive because of prolonged legal time

At a workshop on the afternoon of April 15, businesses “complained” a lot about struggling to take 3-4 years to take care of project legal procedures, wasting a lot of time and money – a fact that contributes to the price of real estate. property, increasing the burden on consumers.

Mr. Nguyen Van Hau, General Director of ASEAN Holding, said that when implementing a project in Binh Chanh (HCMC) from the stage of land fund preparation until it is approved, it takes the investor 4 years to complete the procedure. customary. If the business uses loan capital, only calculates the average interest rate of 10% per year, the company is considered to have to take 4 years to pay this interest.

To shorten the waiting time, the company takes a shortcut by approaching the project through a broker. With complete legal projects, businesses accept to buy at high prices because this is the only way to gain access. High input costs, leading to high product prices, is a fact that occurs in most real estate projects in recent times.

The CEO of ASEAN Holding assessed that each year only a few dozen projects are eligible to open for sale, showing that current legal procedures are the biggest barrier to reducing supply and increasing house prices. According to him, there is a time difference in project legal procedures between Ho Chi Minh City and the southern provinces. In neighboring provinces, the time from approval of the investment policy to the acceptance of technical infrastructure and to the time the book is released to customers takes 1-2 years. In Ho Chi Minh City, on average, it takes about 5 years if it is favorable, but most of the time the waiting time is usually longer.

Agreeing with Mr. Hau, Mr. Ngo Quang Phuc, General Director of Phu Dong Group, analyzed that when developing real estate, businesses have to carry out legal procedures that cannot remove any links and this process often happens. take a long time, the waiting time cannot be estimated.

For example, Phu Dong Group implemented a real estate project in Binh Duong, a province, but it still took 2.5 years to complete legal procedures. The process of documentation and procedures is not simply that the business goes to the department and then has an official dispatch. In fact, businesses have to wait for relevant departments and agencies to have opinions, the time to do legal procedures is very long and greatly affects business costs.

According to Mr. Phuc, businesses really want to increase the supply of affordable housing to meet market demand, but in practice, they face many legal difficulties, leading to many costs, making housing prices too high. follow up.

Mr. Nguyen Manh Khoi, Deputy Director of the Department of Housing and Real Estate Market Management (Ministry of Construction) confirmed, in the two years 2020-2021, the real estate market will be heavily affected by the epidemic, the number of projects dropped sharply, housing prices rose again.

In 2021, the supply of projects and apartments decreased by 34% compared to 2020, while in 2020, the number of new projects decreased by 50% compared to 2019. In 2 years, there were almost no social housing projects. , low-income housing is newly licensed – although this is one of the high-demand segments, supply is low and demand is high. While the supply decreased, housing prices increased sharply and continued to escalate in the first months of 2022.

He said that if finding out the reason why the land treatment process in the provinces took 1.5 years but Ho Chi Minh City took 4 years, the management agency would consider recommending that the localities boldly take responsibility in this area. each part of the project licensing process. The investment procedures coming here must be calculated, recorded in detail, and full of procedures.

On the other hand, Mr. Khoi added that real estate is a multi-disciplinary field, not just one industry that can be solved. Because it is related to many industries, completing the real estate project file requires many procedures, the project is not only related to economy but also related to society, environment, security…

Due to the horizontal review of project legal procedures (spreading across many related departments), each sector has its own procedures, so there is no unified system. “We cannot parallelize this procedure with another. Procedures for the construction industry, land, fire prevention and fighting, and the environment are different,” explained Mr. Khoi.

According to him, although there have been improvements in procedures, the management agency must also consider the consequences, “it is better to make sure first than the consequences later and there are things that cannot be checked later”.

The consequence of the legal entanglement is that not only commercial housing projects are “suspended” but also affordable housing and social housing. Statistics show that there are still many land funds for the development of social housing and low-cost housing projects but cannot be implemented. Some businesses have a land fund to build social houses but do not want to build and some investors want to build cheap houses but Ho Chi Minh City does not agree due to many regulations.

“It will be necessary to re-study the social housing licensing procedure in the direction of fewer procedures compared to commercial housing. The Ministry of Construction will study more about this issue in the process of amending the law in the near future,” he said. Start to see.

Vu Le