Paradox: House prices are 24 times more expensive than Vietnamese income

Businesses believe that every additional year the construction permit procedure takes, the cost increases by 5% and this money is "passed" on to home buyers.

The above reality was raised by experts and business representatives at the workshop on the Law on amending and supplementing laws on investment and business on August 11.

Contributing his opinion at the workshop, Dr. Le Dang Doanh - former Director of the Central Institute for Economic Management (CIEM) cited the fact that housing prices are currently too far apart from people's income. "If in other countries, the average housing price is only more than 5 times the income of people, in Vietnam, this number is up to 22-24 times. That is a paradox and also a tragedy," Dr. Doanh said.

This person also warned that in 5-10 years, Vietnam will fall into a situation where the number of people without homes will increase rapidly, while land funds and incomes are limited... This will cause major social consequences such as disputes and land and housing appropriation... Therefore, he said that it is necessary to clarify the effectiveness of State management on the basis of minimizing the cost of time, administrative procedures... which are pushing up costs and housing prices.

Businesses say that cumbersome construction and project investment licensing procedures have pushed up costs and housing prices.

Explaining more specifically about the paradox of housing prices as an "insider", Mr. Nguyen Van Duc - Deputy Director of Dat Lanh Real Estate Company LimitedBack to the period more than 10 years ago, when businesses wanted to apply for a construction permit or invest in a project very simply. "But from 2010 onwards, the proceduresnot only"The simplification tends to expand, making businesses struggle," Mr. Duc commented.

This person also confided that the above procedures are currently binding businesses, and the consequences are:In the end, it will be the people, specifically home buyers, who will have to bear the brunt. According to Mr. Duc's calculations,Every additional year of project investment licensing and construction procedures increases business costs by 5%. “These additional costs are all “run” into the selling price of the house.This is paradoxical", the leader of this business said and believed that there are currently many administrative procedures that can be cut immediately, switching to post-audit as before 2006. This will both help businesses and reduce suffering for people...

Admitting that there are still "interest groups, power brokers, and my power holders in many ministries, departments, and branches", but speaking from the perspective of a researcher, Deputy Chairman of the National Assembly's Economic Committee - Nguyen Duc Kien also shared his own explanation for whyReal estate businesses are forced to increase home prices due to high procedural costs.

“Real estate businesses are the middle class, not on the side of consumers,” Mr. Kien said frankly. Therefore, when studying to amend any law, Mr. Kien believes that we must study the substance, go to the end, and not just look at the surface. “The State must regulate common profits, it cannot just blindly regulate for a certain group,” he stated.

Agreeing with the view that State management must be effective, Dr. Le Dang Doanh said that management at any level must follow procedures and that businesses cannot be "harassed". He noted thatHi, if you have written to study and amend the law, it must be in the direction of service.and propose to consider and review the necessity of the Investment Law.

Sharing the concerns and wishes of Mr. Nguyen Van Duc "when will the old days come back", Dr.Nguyen Dinh Cung, the current Director of CIEM, said that any policy that benefits businesses and people must be urgently revised, and should not wait to be "collected into one entity".Mr. Cung assessed that this orientation is consistent with the spirit of innovation, creation and determination to remove barriers and obstacles that the new Government is aiming for.

According to VNE