Paradox: House prices are 24 times more expensive than Vietnamese people's 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.

Giving his opinion at the workshop, Dr. Le Dang Doanh - former Director of the Central Institute for Economic Management (CIEM) cited the reality of the huge gap between housing prices and people's income. "In other countries, the average housing price is only 5 times higher than people's income, but in Vietnam, this figure 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 and 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 house price paradox as an "insider", Mr. Nguyen Van Duc - Deputy Director of Dat Lanh Real Estate Company Ltd.Going back to the period more than 10 years ago, when businesses wanted to apply for a construction permit or invest in a project was very simple. "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:Ultimately, it will be the people, specifically home buyers, who will have to bear the brunt. According to Mr. Duc's calculations,Every year that the project investment and construction licensing procedures take, the business will have to pay an additional 5%. “These additional costs are all passed into the home selling price.This is a paradox.", 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 the people...

Admitting that there are still "interest groups, power, and authority 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 it is necessary to study the substance, go to the end, and not just look at the surface. “The State must regulate the common profit, it cannot just blindly regulate for a certain group,” he stated his opinion.

Agreeing with the view that State management must be effective, Dr. Le Dang Doanh said that management at any level must follow procedures and cannot allow businesses to be "harassed". He noted thatIf you have written to research 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, Dr.Nguyen Dinh Cung, current Director of CIEM, believes that any policy that benefits businesses and people must be urgently amended, and should not wait to be "consolidated into one entity".Mr. Cung assessed this orientation as consistent with the spirit of innovation, creation and determination to remove barriers and obstacles that the new-term Government is aiming for.

According to VNE