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Article by Ms Trang Le, Manager, Research and Consulting, JLL Vietnam
In Vietnam, transparency in real estate market has always been a hot topic. According to the JLL's 2016 GRETI report, Vietnam is classified as country with low-transparency (being ranked 68 out of 109 countries). However, the market has shown signs of improvement during the past two years. In 2014, Vietnam was classified as a country with low-transparency and in 2016 the country is considered "on the cusp of Semi-transparent".
Improvement in real estate market is observed in various aspects, from clearer provincial planning information, investment procedures and better project information provided to buyers, or tenants, this provides reassurance for end-users.
According to the World Bank, albeit continuous improvement in land information disclosure, Vietnam still requires more progress. In July 2015, the World Bank approved the $150 million Vietnam improved Land governance and Database project. The project will develop an Information system and land database and make it available to both the Government and the public. In addition, the project will asssit to simplify the procedure and business processes relating to land services. This credit package will help to speed up the renovation in land monitoring processes, investment procedure as well as providing project information that ultimately will enhance the Vietnam investment climate.
Project information transparency has notably improved in the residential market. In recent years, numerous policies, regulations in terms of transparency have been implemented. Following decree 76/ND-CP, a list of projects which are entitled to sell land use right has been released. Recently, a list of mortgaged projects at local commercial banks has also been published according the authority's request in reassessing the projects'status across the city. These collectively are being seen as positive actions to promote the transparency to the market. Notwithstanding those actions, the process has not been carried out in an effective way due to lack of synchronisation, consistency and lack of implementation and monitoring. From the developers' side, the disclosure of project information is being carrying out in a more adequate and proactive manner. However, there is still a lack of concrete regulation firmly applied to obtain the accuracy of disclosed information.
With the development of advanced technology and an influx of capital into the Vietnam real estate market transparency will need further enhancement in future. Sophisticated technology will provide a better tool to improving market transparency and the strong influx of capital will push the demand for transparency to a higher level than previously seen. It is inevitable that as the inflow of capital into real estate market becomes stronger, there will be an increase in demand for transparency. However, implementation of a fully transparent system as seen on more mature markets will be a time-consuming process that will require considerable time and effort from all parties stakeholders.
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