Real Estate Market: Lacking Transparent Information

 

The fact is that Vietnam’s real estate market does not lack supply, but the prices of properties on the market are always driven by speculators. A survey on media as well as on electronic transactions shows that although information involved in properties is various, it is very difficult to access accurate information. Currently, many clients in the market to buy houses and apartments do not know exactly where they can get information and direct transactions. Thus, most of them must complete transactions indirectly.

 

The lack of accurate information helps keep the market unstable, because it serves a group of people. In addition, many real estate marketing companies refuse providing adequate and exact information on property projects. This demonstrates why prestigious real estate marketing companies in Vietnam are mainly foreign-owned ones. 

 

Normally, as a client buys an apartment, he/she has rights to the management system and enclosed facilities and services. However, frequently these rights are arbitrarily withheld and in fact there have been many disputes relating to which clients can use services free and which must pay, including those at huge urban areas such as Phu My Hung and the Manor. These problems are attributed to the lack of transparency in providing relevant information. Many buyers do not spend time to study the information surrounding the project in which they intend to buy apartment.

 

Speaking about transparency in Vietnam’s property market, real estate experts said that consumers should be clever and sharp, collecting as much information as possible to avoid risks. If consumers cannot find adequate information by themselves, they should meet with legal consultants. Real estate consultancy service has existed abroad for a long time, but it has not emerged in Vietnam. Currently, in Vietnam there are only consultants for sellers. The transparency of the property market is also assessed via other elements such as manager, enterprise, investor and even buyer. The prices should be more transparent to help buyers choose easier. Because of the lack of transparency, while more than 300 projects were publicized before Ha Tay province merged into Hanoi, authorities later reviewed them and many projects had to be halted.    

 

Of course, in any sector there are speculators to seek profit. If well controlled, speculators play a role as an element to excite the market. Each speculator agrees to the risks of investing, and many speculators do in fact lose money. Thus, speculation is not completely bad. A free market allows speculation because it is not easy to sway the property market. For consumers buying a house for living, the light fluctuation of property prices is not as important as their purchasing capability. In theory, the real price is the price to trade on the market. Many enterprises sell an apartment at the price level X. After that, the buyer continues to sell at the price level X+. Enterprises know that but they still do it because of many reasons, such as the need to recover capital, tax evasion and so on.   

 

Answering the question of how to limit the risks of property trading, experts said that small investors need to be careful in pouring capital into the market. One method which has become popular is that investors contribute capital to an underway property project to be empowered to buy apartments or houses upon the completion of construction. In fact, this is very risky, particularly for small investors, because in some cases they are not named as shareholders in the project.