HANOI: Vietnam plans tax policies to discourage speculation in a housing market hit by soaring prices, state media reported on Wednesday (Jan 14).
Investment in real estate is very popular in Communist-run Vietnam, where capital controls limit overseas investment, and it has recently been boosted by rapid government-backed growth in bank lending.
The amount of capital flushing into the sector has encouraged speculation, with houses changing hands within months and remaining vacant for long periods. Entire neighbourhoods in big cities have also stayed empty long after construction had been completed.
Speaking at a government meeting on housing policy, Prime Minister Pham Minh Chinh called for measures to cool prices for homes, particularly apartments, state broadcaster VTV reported.
"Housing is an essential need, and equal access for all citizens must be ensured," Chinh was quoted as saying. The report gave no timeframe for the introduction of new measures.
In September Chinh called for the construction of more houses to cool soaring real estate prices.
The new appeal comes days before the start of a five-yearly congress of the ruling Communist party, which will decide who will lead the country until the end of the decade.
Affordability concerns rise as house prices soar
Prices for apartments in Vietnam rose by 20 - 30 per cent last year, while those for land plots increased 20 -25 per cent, according to the construction ministry.
In big cities, prices last year rose to an average of 100 million dong (US$3,804) per square metre, according to industry data. The average annual salary of Vietnamese workers is around 100 million dong, according to government data.
Chinh on Wednesday called on the finance ministry to ensure there was enough funding for a social housing programme that aims to build up to one million apartments for low-income earners by 2030.
Developers have recently focused on building high-end accommodation.
The finance ministry didn't immediately respond to a Reuters request for comment.
"I think it will be very difficult to get rid of speculation in the real estate market," said a Hanoi-based real estate broker, who declined to be named in order to speak more freely in a country where the state tightly controls public debate.
"People with money still choose to invest in homes as a safe investment channel, while any strong measures to crack down on speculation would ultimately hurt property developers, which play an important role in the economy," the broker said.
Vietnam's central bank said over the weekend that it aimed to slow credit growth this year, while tightening controls over loans to risky sectors, including real estate.
Shares of real estate companies on local stock market fell 2.6 per cent on Wednesday morning, with the largest property developer Vinhomes falling 5.2 per cent and Kinhbac City down 0.6 per cent. - Reuters
