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LAND LAW CALMS THE HOT REAL ESTATE MARKET
Saturday, August 20, 2005 Vietnam News

In the time since it was promulgated, has implementation of the Land
Law been successful?

The 2003 Land Law has been accepted in reality and has had a visible
effect in reducing uncontrolled land speculation and trading. We can
say it has reduced the "fever" in land prices, as prices have actually
fallen in many areas.

Before the Land Law was put into effect, many land-related problems
existed. Most of these problems have now been solved. Residents can
have peace of mind in enjoyment of their land use rights.

After more than a year implementing the Land Law, what concerns do you
have?

We want to issue land use certificates to people, the sooner the
better, but progress so far has been slow. Besides this,
administrative procedures on land have been simplified to create
favorable conditions for people and enterprises, many officials are
still causing trouble to residents in implementing the regulations.
Planning and land use plans, particularly at district and commune
levels, are still slow.

Can you explain why the progress of issuing land use certificates to
residents is still so slow?

The reason is that land management systems in districts still have
shortcomings, while there is a lot of work to do. It is costly to
issue land use certificates to all residents, and many localities have
not earmarked enough to cover this expense.
Another reason is that with new land prices, many households find it
difficult to pay the land use fee. In Hanoi, after ten years of
selling State-owned houses to residents, only 45 percent of the houses
have been sold. There are 86,000 houses which cannot be sold, because
of high land prices.

Do you think that the current real estate market standstill will have
a negative impact on economic development?

The real estate market is at a standstill, and this will cause a
negative impact on the national economy , especially to investments,
financial and credit sectors. But, this is the price we have to pay
because we did not carefully manage the real estate market in the
past. We have only two ways to go. First, let land speculators drive
up land prices so that we have an overheated real estate market but
this has negative consequences on people. The second way is to fight
land speculators and reduce the "land fever". The real estate market
will be temporarily frozen but it can be put in order and made
healthier in the long term. We chose this way and we forecasted that
the real estate market would be chilled for a time.


So, you think that the real estate market will become livelier again?

The earlier situation of land speculation and uncontrolled land
trading will never happen again. In the future, the real estate
market will warm up again, because demands for real estate are
increasing. When people's income rise, their demands for
accommodation also increase, and that is a basis on which the real
estate market can develop in a healthy manner.

Can Foreigner's set on title for land use rights?

Yes, but some restrictions apply.

Why would a foreigner be involved with land use rights? ( Buying Real
Estate in Vietnam)

That's easy, to save money on the long term and invest in solid areas
of interest that may be related that that foreigner's business and
personal interests. As we know renting is an inherent loss of doing
business but it can be avoided in some cases where the Land Law now
permits investors to hold the Land Use Rights holder.

(Restrictions do apply and must be thoroughly investigated before
investing.)