HCMC - The Ministry of Construction will issue a long-awaited guidance circular for a government decree governing the real estate market in the coming days.
The circular will provide much-needed guidelines for the implementation of Decree 71/2010/ND-CP which came into force on August 8.
“We are in the last stages of collecting comments from the relevant state agencies and realty firms before the circular comes out,” said Nguyen Manh Ha, head of the housing management department of the ministry.
Speaking at a seminar held in HCMC last week by the HCMC Association Real Estate to propose some revisions to the draft circular, Ha said the new decree was more liberal than the old one.
Real estate developers, according to the decree, can issue corporate bonds and raise capital from secondary investors in addition to funding from traditional sources such as banks and business partnerships.
Funds raised from these two channels before the foundation of a project is complete may account for up to 20% of the total number of property products. However, those products cannot be transferred until the foundation has been finished.
Banning developers from transferring the contracts on capital contribution results from the fact that many developers mobilize funds from customers but then delay their projects for three to five years, leading to their disputes with buyers.
The restriction on this kind of transfer will help prevent speculators from buying properties and changing hands shortly after that since this practice has been blamed for spikes in property prices.
Realty firms complained at the seminar that the new rule allows them to raise money from customers but restricts the transfer of properties bought through a capital contribution contract.
