The realty trading law regulates companies, individuals who trade in real estate must do so via a trading floor where there are regulations and conditions for such transactions, but up till now it has not yet been seen anywhere a genuine trading floor that can be deemed a standard one to meet the spirit of the law.
From a chaotic practice
For a long time, property trading offices have been established and operated in a spontaneous way, mostly serving as venues to provide brokering services. There have been a great deal of transactions there, but they are often conducted in an unprofessional and scattered manner. Most have operated without standard regulations for organization, operation, and especially responsibility towards customers. Many of them even provide wrong information, causing losses to buyers without being held responsible. Those under-the-table transactions have publicly taken place and have gone beyond the control of management agencies.
Meanwhile, for a long time, the State has failed to collect substantial tax amounts that should have been generated from such transactions, since the transaction values stated in contracts are often much lower than the real ones.
Over the past one year, since the realty trading law was issued, many companies have been trying to fumble for a right way for a standard realty trading floor. Even when Decree 153 was issued last October to guide the implementation of the law, companies are still confused as how to apply the law into the real life. Thus, most centers and transaction offices have been operating under their own old way.
Nevertheless, as the deadline January 1,2009 is approaching when all realty transactions must be performed in a legal manner via recognized trading floors, trading companies are still waiting for a circular to implement the decree.
Currently, the Ministry of Construction is making a draft circular on one hand, and is collecting ideas and feedback on the trading floor on the other. The Ministry has approved a pilot standard reality trading floor in HCMC.
The Saigon Cholon Real Estate Investment Joint Stock Company (Inresco) and Phat Hung Real Estate Company have been entrusted to carry out the pilot project. This is seen the first step towards the establishment of a better realty market, and also a chance for relevant agencies to earn more experiences before identifying a model that will be multiplied and applied nationwide.
Ready for opportunities
Inresco and Phat Hung have won the confidence from State agencies to establish a realty trading floor as the two companies have thoroughly prepared a plan on such a trading floor, which has convinced the Ministry of Construction.
"The proactive drafting of a project of standard realty trading floor comes from our need for stable development to compete with other rivals on the market in the long term, especially with the anticipated involvement of foreign competitors," says Dang Van Thanh, Phat Hung's director of marketing.
Meanwhile, Inresco wants to speed up the establishment of a trading floor to sell its products in conformity with the realty trading law. Nguyen Van The, deputy general director of Inresco, says the company has seen its partner Phat Hung as having great potentials owing to its effective sales network and rich experience. The two companies therefore have teamed up for the project, hoping that they would be pioneers in the new realty trading model to have an edge over other competitors at the time when all realty trading and service activities have to circle on its orbit.
Challenges ahead for the pilot project
As planned, the realty trading center will be located at 67 Nguyen Thi Minh Khai Street in District 1. It will includes seven services namely buying and selling, realty transfer, property for rent/brokerage, property auction, consulting, advertising, and management. Traders can access information through networked computers, websites as well as reports and documents with information relating to trading everyday.
However, the major concern for the trading center organizer is the legal aspects relating to the property put up for transaction, as specified by the law.
"The would-be trading floor has a legal entity, a has a right to say no to those transactions that violate regulations as well as is responsible for property trading activities there," says Thanh of Phat Hung. He explains that the trading floor is held accountable for the legalities of properties traded there, before the law as well as before customers.
He also shows great concern over how the center can satisfy both regulations and customers' benefits, given the fact that many property transactions on the local market have been conducted in the absence of transparency, such as the price stated in the contract.
Therefore, although the center is planned to start operation right in the second quarter this year, the organizers admit that there will be many things to be accomplished before as well as after the debut of the trading floor. The two companies therefore plan to invite several more companies to join their trading floor for better strength to deal with the challenge ahead.
Many are pinning high hopes on the realty trading floor, expecting that the standard floor will help improve the transparency on the local real estate market to guarantee tax revenue for the State on one hand and to protect the interests of customers on the other. Last but not least, it will help relevant organizations to catch up with market information, from which they can have a correct judgment before bringing out proper policies for realty development in the future.
From a chaotic practice
For a long time, property trading offices have been established and operated in a spontaneous way, mostly serving as venues to provide brokering services. There have been a great deal of transactions there, but they are often conducted in an unprofessional and scattered manner. Most have operated without standard regulations for organization, operation, and especially responsibility towards customers. Many of them even provide wrong information, causing losses to buyers without being held responsible. Those under-the-table transactions have publicly taken place and have gone beyond the control of management agencies.
Meanwhile, for a long time, the State has failed to collect substantial tax amounts that should have been generated from such transactions, since the transaction values stated in contracts are often much lower than the real ones.
Over the past one year, since the realty trading law was issued, many companies have been trying to fumble for a right way for a standard realty trading floor. Even when Decree 153 was issued last October to guide the implementation of the law, companies are still confused as how to apply the law into the real life. Thus, most centers and transaction offices have been operating under their own old way.
Nevertheless, as the deadline January 1,2009 is approaching when all realty transactions must be performed in a legal manner via recognized trading floors, trading companies are still waiting for a circular to implement the decree.
Currently, the Ministry of Construction is making a draft circular on one hand, and is collecting ideas and feedback on the trading floor on the other. The Ministry has approved a pilot standard reality trading floor in HCMC.
The Saigon Cholon Real Estate Investment Joint Stock Company (Inresco) and Phat Hung Real Estate Company have been entrusted to carry out the pilot project. This is seen the first step towards the establishment of a better realty market, and also a chance for relevant agencies to earn more experiences before identifying a model that will be multiplied and applied nationwide.
Ready for opportunities
Inresco and Phat Hung have won the confidence from State agencies to establish a realty trading floor as the two companies have thoroughly prepared a plan on such a trading floor, which has convinced the Ministry of Construction.
"The proactive drafting of a project of standard realty trading floor comes from our need for stable development to compete with other rivals on the market in the long term, especially with the anticipated involvement of foreign competitors," says Dang Van Thanh, Phat Hung's director of marketing.
Meanwhile, Inresco wants to speed up the establishment of a trading floor to sell its products in conformity with the realty trading law. Nguyen Van The, deputy general director of Inresco, says the company has seen its partner Phat Hung as having great potentials owing to its effective sales network and rich experience. The two companies therefore have teamed up for the project, hoping that they would be pioneers in the new realty trading model to have an edge over other competitors at the time when all realty trading and service activities have to circle on its orbit.
Challenges ahead for the pilot project
As planned, the realty trading center will be located at 67 Nguyen Thi Minh Khai Street in District 1. It will includes seven services namely buying and selling, realty transfer, property for rent/brokerage, property auction, consulting, advertising, and management. Traders can access information through networked computers, websites as well as reports and documents with information relating to trading everyday.
However, the major concern for the trading center organizer is the legal aspects relating to the property put up for transaction, as specified by the law.
"The would-be trading floor has a legal entity, a has a right to say no to those transactions that violate regulations as well as is responsible for property trading activities there," says Thanh of Phat Hung. He explains that the trading floor is held accountable for the legalities of properties traded there, before the law as well as before customers.
He also shows great concern over how the center can satisfy both regulations and customers' benefits, given the fact that many property transactions on the local market have been conducted in the absence of transparency, such as the price stated in the contract.
Therefore, although the center is planned to start operation right in the second quarter this year, the organizers admit that there will be many things to be accomplished before as well as after the debut of the trading floor. The two companies therefore plan to invite several more companies to join their trading floor for better strength to deal with the challenge ahead.
Many are pinning high hopes on the realty trading floor, expecting that the standard floor will help improve the transparency on the local real estate market to guarantee tax revenue for the State on one hand and to protect the interests of customers on the other. Last but not least, it will help relevant organizations to catch up with market information, from which they can have a correct judgment before bringing out proper policies for realty development in the future.
Source: Saigon Times
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