Real Estate News – Vietnam’s real estate market not transparent

VIETNAM'S real estate market is not transparent mainly due to lack of relevant legal documents and poor land-use planning, according to a local newspaper.

Now, Vietnam does not have a real estate registration law, and sufficient realty market-assisting activities such as the establishment of concentrated land and house trading floors and provision of relevant financial and banking services.

Besides, land planning is not good, and not publicised in many cases. In foreign countries, consultants are hired to map out land-use plans, but in Vietnam in many cases, leaders of relevant sectors join hands in doing the work, which makes the local realty market less transparent.

Lacking relevant legal documents, Vietnam has to see 70-80 per cent of realty transactions made by traders and residents by themselves without supervision and recognition of authorised state agencies, the newspaper said.

In Ho Chi Minh City alone, there are 4,000 licenced real estate enterprises and some 2,000 unlicenced ones, two-thirds of which are established to mainly act as intermediaries between property buyers and sellers, the paper quoted statistics from relevant organisations.

For all the reasons, prices of houses and apartments in Vietnam are inflated. For flats in new urban areas, one square meter is sold for, on average, 8-10 million Vietnamese dong (503- 629 U.S. dollars), but its construction cost stands at only 2-2.5 million Vietnamese dong (126-157 dollars), the newspaper said.

According to the latest edition of Real Estate Transparency Index (RETI), the only index tracking transparency in commercial realty across 56 countries and regions across the world compiled by U.S. group Jones Lang LaSalle, Vietnam is at the bottom with the index of 4.69. Australia has the highest transparency with the index of 1.15.

Meanwhile, Vietnam will intensify export of footwear to traditional markets, including the United States and the European Union (EU), in a move to reap 6.2-6.5 billion U.S. dollars from exporting the products in 2010, according to a local agency.

Vietnam plans to earn over one billion dollars in 2010 from shipping footwear to the United States, equal to more than five per cent of the foreign country's total footwear import turnover, the Trade Information Center under the Trade Ministry said, noting that the percentage was three per cent in 2005.

Vietnam also eyes revenue of over 3.2 billion dollars for footwear exported to the EU in 2010, accounting for more than 7.5 per cent of the block's total footwear import turnover in the year.

The local product exported to the EU made up 7.3 per cent of the block's total footwear import turnover in 2005.

Besides the two key markets, Vietnam is boosting footwear export to countries and regions with big purchasing power, including Japan, Canada, China's Hong Kong, South Korea and Australia, and markets with high potential growth like Indonesia, Malaysia, the Middle East, Africa, South Asia and Russia, the center said.

Relevant Vietnamese agencies are intensifying trade promotion activities, expanding support to leather footwear producers and exporters, and further studying fashion trends in overseas markets to make suitable products.

Vietnam is predicted to see average annual growth of 16.7 per cent in footwear export earnings in the 2006-2010 period, the center said. It is expected to gain footwear export turnover of 3. 3 billion dollars this year, up from over 3.0 billion dollars last year.

Vietnam is estimated to earn nearly 2.1 billion dollars from exporting footwear to the world market in the first seven months of this year, a year-on-year rise of 22.3 per cent, according to the country's General Statistics Office.

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