According to Director of the House and Real Estate Market Management Department under the Ministry of Construction (MOC) Nguyen Manh Ha, there are 226 real estate trading floors nationwide. However, in the first eight months of the year, only 3,500 transactions were carried out on trading floors, or 20 percent of total transactions. The other 80 percent of transactions did not go through the floors.

 

Ha cited a lot of reasons to explain the low percentage of transactions carried out on trading floors. However, he admitted that the main reason behind this is that the investors of real estate projects do not want to put their products into transactions on trading floors, even though the laws stipulate that all real estate transactions must be carried out on trading floors.

 

One of the ‘tricks’ real estate developers have used to ‘dodge the laws’ is selling real estate products under the mode of ‘capital contribution’ contracts, i.e. investors call for capital from buyers. While projects are still on paper, real estate project investors begin mobilising capital from people. Those who make capital contributions to the projects are able to purchase the products in the future, when they’re are completed.

 

Analysts have estimated that up to 70 percent of real estate projects have been sold under the mode of ‘capital contribution’ contracts.

 

However, Deputy Minister of Construction Nguyen Tran Nam affirmed that the current laws do not prohibit investors from mobilsing capital from potential buyers. No investor would have enough to implement projects if they did not mobilise capital from other sources, such as bank loans and future customers.

 

Nam also said that it is understandable and acceptable that real estate investors reserve some products for strategic shareholders or important partners. In this case, transactions would understandably not go through real estate trading floors.

 

Nam said that the Ministry of Construction has been aware of the problem and it is going to compile a document allowing real estate developers to sell a certain percentage of products without having to go through trading floors.

 

 

There are 226 real estate trading floors nationwide, which is considered a big number for a market like Vietnam and for the initial period after the decision on forcing developers to carry out real estate transactions on trading floors was released. However, the information people can get from real estate trading floors is still quite limited.

 

Nam of MOC, on one hand, admitted the bad quality of real estate trading floors’ operations, on the other hand, said that the problems are inevitable.

 

Nam said that he himself, who is involved with the management of the real estate market, does not know how many real estate projects there are on the market, let alone the average person. Meanwhile, real estate trading floors have blamed the quietness of trading floors on the legal framework and the lack of readiness of people to carry out transactions on trading floors.

 

Pham Ngoc Thanh, Director of Tacecoland real estate trading floor, urged government agencies to rethink their stance on allowing real estate investors to mobilise capital from buyers before projects are kicked off, saying that this could kill off real estate trading floors in their infancy.

 

Chairman of Dat Xanh Real Estate Corporation Luong Tri Thin said that many real estate investors are simply attempting to evade tax. That explains why only 3,000 real estate transactions were carried out in the whole of August, or 15 transactions per day, figures which did not truly reflect reality. However, Nam said that the problems should be seen from different aspects, adding that besides good trading floors, there are also floors that provide inaccurate information.

 

“Someone asked me to help purchase apartments at Van Canh project after he was introduced by a trading floor. However, when I asked the project’s investor, I found out that the project had not been kicked off yet, though it had been put into transaction on trading floors,” he related.