PROPERTY MARKET INFORMATION MUST BE ADEQUATE, ACCURATE

Several property developers voiced their fears in response to an announcement by the HCM City watchdog of publicising the names of developers who have mortgaged their unfinished housing projects. The developers said that inadequate mortgage information was causing confusion and misunderstanding among home buyers and seekers.

Announcing projects which were mortgaged was a drastic move to improve the transparency of the housing market, Le Hoang Chau, president of the HCM City Real Estate Association said. "However, this is creating an erroneous impression that developers named in the list do not have sufficient financial capacity," Chau said.

Châu said that in Viet Nam, property developers relied significantly on banking credits to develop their projects.

Tran Ngoc Quang, general secretary of the Viet Nam Real Estate Association, estimated that more than 70 per cent of capital for the realty market came from banking loans.

Le Hung Manh, chairman of Gia Hoa Company Ltd, who was included in the list, said that many of their buyers were worried by the announcement of the HCM City Department of Natural Resources and Environment as the developer had earlier informed its buyers that it did not borrow money from banks.

Hung said that his company's project was in the list as it was mortgaged to apply for a bank guarantee to undertake transactions for an unfinished property, which was compulsory under the current regulation.

Mortgaging projects for a guarantee to transact unfinished products was beneficial to buyers, lawyer Pham Van Minh from Minh Lawyers said.

According to Chau, even then, there were violations by property developers who used banking loans for incorrect purposes, undermining the confidence of buyers.

The association urged banks to tighten supervision towards the use of credit provided to developers as well as mortgaged assets.

In addition, the Department of Natural Resources and Environment should clarify the purpose of mortgaging each project to prevent confusion, the association said.

Source: VIR