Requirements to control the operation of real estate exchanges

On April 29, the Ministry of Construction announced information about housing and the market real estate Quarter I-2022. In this report, the Ministry of Construction has made many recommendations to correct and prevent violations of real estate business.

The Ministry of Construction has made many recommendations to correct and prevent violations of real estate business (illustration image).

Regarding the bond issuance situation in the real estate sector, the Ministry of Construction said that according to the statistics of the Bond Market Association (statistics of SSC and HNX), there were a total of 48 issuances in the first quarter of 2022. privately issued with a total value of about 30,998 billion VND and 9 issuances to the public with the value of 8,696 billion VND. The Real Estate group is currently leading in issuance value with a total issuance volume of VND 17,211 billion, accounting for 43.36% of the total issuance value.

According to the assessment of the Ministry of Construction, the fact that many real estate businesses move to mobilize capital through the issuance of bonds, large-scale issuance and high interest rates will pose potential risks to the market. : Firstly, bond issuance is many times larger than equity, in some cases 40 times equity. Second, the issuance term is short (from 3 to 5 years), especially for real estate businesses that mobilize to deploy projects (project implementation time is usually longer, over 5 years). Third, collateral assets are real estates and projects, while the valuation of collateral may not be close to the actual price (a higher valuation than the actual value).

Based on the actual situation happening in the real estate market, the Ministry of Construction said that currently the real estate market is lacking in supply in all segments. The number of commercial and social housing projects licensed to build, complete and put into use is limited and tends to decrease. Prices of houses and residential land increased higher than people’s incomes. In big cities like Hanoi and Ho Chi Minh City, there are almost no apartments under 25 million VND/m2.

Along with that, the phenomenon of auctioning land use rights in some localities has shown abnormal signs, high auctions and then depositing have negative impacts on the real estate market such as creating high land prices, impacting increase the prices of neighboring real estate and houses compared to the actual market; affecting the environment calling for investment and the recovery, compensation, project implementation of the localities…

The issue of corporate bonds, especially real estate bonds, in recent times not complying with the provisions of the law poses many risks to the real estate market.

The division of plots, subdivision of plots for sale in some localities has not been in accordance with the provisions of law. This situation affects the construction order, adversely affects the face of urban areas and residential areas of localities such as: spontaneous construction investment, not in accordance with the planning, not ensuring the synchronization on technical infrastructure, social infrastructure; creating opportunities for speculation, pushing up real estate prices to make profit, … affecting the real estate market.

The operation of real estate exchanges has not yet ensured the good management of real estate transactions, prevention of money laundering in the real estate sector; business activities of real estate brokerage services have not been well controlled. There is a phenomenon that real estate exchanges “hug goods”, “make prices”, “create waves”, “blow prices”, causing “virtual fever” to eat the difference, disturbing the real estate market. ..

The Ministry of Construction requested localities to urgently monitor and grasp information and developments of the market and take timely handling measures to stabilize the market, to prevent price fever and bubbles from occurring. real estate in the area.

To take measures to manage and prevent the illegal division of plots, “subdivision of plots, sale of plots” in areas without planning, not yet permitted for investment, lacking in infrastructure system; review the organization of auction of land use rights in the area to ensure compliance with the law, publicity and transparency; strengthen control over the operation of real estate trading floors, organizations and individuals practicing real estate brokerage; correct the behavior of buying and selling changing hands many times, “blowing prices” causing disturbances in real estate market information

The Ministry of Construction proposed localities to step up law dissemination, strengthen management, supervision, inspection and inspection, and strictly handle cases of violations of the law on real estate business. real estate, land law, construction law and relevant laws (if any), especially activities: unauthorized and illegal construction; investing in infrastructure, dividing plots or subdivisions not in accordance with the planning; advertising, brokering “ghost projects”, violations in the auction of land use rights… causing market disturbances.

Van Duan