The real estate market still has shortcomings that need to be solved, including legal issues. The land fever is partly due to the impact of the 2013 Land Law, expanding regulations on subdivision of land lots for sale

New housing models like condotels are still having problems.

Overlapping laws need to be dismantled

In order for the real estate for the construction sector to better develop, the representative of the Vietnam Construction Association made recommendations to remove barriers to help the market overcome the current challenges.

Dang Viet Dung, Chairman of the Vietnam Construction Association, said that when the Covid-19 pandemic started, the construction industry was also influenced but not as much as real estate and tourism.

In 2020, the contribution of construction businesses to the country's GDP will be huge. That is thanks to the space of enterprises from many years ago, along with the public investment of the State that has promoted construction activities.

“In order for the industries to develop sustainably, I think, it is necessary to continue to build “the tectonic government”, continue to cut administrative procedures, so that real estate enterprises and construction enterprises can operate smoothly,” Mr. Dung said.

Besides, the overlaps in laws need to be removed. For example, there are still new housing models such as condotels facing problems, causing difficulties for the market.

In 2021, if the above difficulties are solved, the construction and real estate industries will have many favorable conditions to develop.

Many shortcomings in the 2013 Land Law

Regarding legal issues, one of the issues that investors are very concerned about is the revision of the 2013 Land Law. Regarding problems in the 2013 Land Law, Prof. Dang Hung Vo said that from 2016 to 2020, the Government had instructed four times to amend the Land Law.

However, since 2016, the Land Law has not been revised, and it may not be possible to do so until 2023.

Prof. Vo said that at present, the law still has many major shortcomings, hindering the development of the economy. Vietnam's development opportunities are quite large but are still congested with old regulations on land.

Regarding some outstanding issues of the Land Law, according to Prof. Dang Hung Vo, the first issue is agricultural land. Currently, agricultural land has not yet implemented effective land accumulation and concentration.

This is a complicated issue and needs to change. At present, the land transfer in rural areas is not done according to procedures, but it is still handed over.

Secondly, housing development still has many bottlenecks. Hanoi and Ho Chi Minh City are the two largest markets, but in the 2019 – 2020 period, only a few projects could be approved in these localities each year. By the end of 2020, the Government will have Decree 148/2020/ND-CP on solving problems for projects.

The third is the congestion for tourism real estate projects. The current Land Law does not have any lines of this type.

Fourthly, foreigners buy land in Vietnam.

"The important thing is that these shortcomings have a direct impact on the real estate market and it distorts the market," said Prof. Dang Hung Vo.

Regarding the land fever issue, this expert also said that the land fever is partly due to the impact of the 2013 Land Law when expanding regulations on the subdivision of land lots for sale.

According to him, countries around the world only use the form of subdivision of land lots for sale to settle housing in urban areas, not commercial land. Putting land into commercial use is very rare.

He said that, in principle, the real estate market must exploit the value of investment in land, not wait for the land price to rise to reap profits. Investing in real estate to increase prices, then selling is an act of harming the economy.