Digital transformation: Transparent way to combat “land fever”
When people lack information about planning and land use plans, especially projects under survey or preparation phases, it is easy for land brokers or traders to blow up land prices to seek profit.
"Every time I thought that I had accumulated sufficient money to buy an apartment, the house price increased," lamented Mr. Do Van Hai from Ha Dong district, Hanoi.
With a total of VND1.6 billion, consisting savings and some money borrowed from their relatives and friends, Hai and his wife searched for a small apartment. However, after more than twi months searching many housing projects, Hai found that the apartment prices increased.
In recent surveys, more than half of young people said that it was getting harder for them to own a house. If they want to buy an apartment of about VND1.5 billion (the cheapest apartment at present), it takes them about 20 years. But by the time they have VND1.5 billion, the price for a similar house will be much higher.
According to a survey by a market research company, in the past five years, house prices have increased by 50-60%. In 2015, the price of a Grade B apartment was about VND 25 million/m2, but at present it is VND 40 million/m2. Similarly, the price for a Grade C apartment in 2015 was about VND 15 million/m2, it is VND25 million/m2 at present. The price for land has increased much higher in the past five years, by 100% or even more than 200% in some places.
Lessons from the world
The “land fever” that is happening in Vietnam was witnessed in some Asian countries before, such as South Korea and China. Yonhap news agency cited government data that South Korea's super-rich, who make up 1% of the country's population, have an average of 6.5 houses per person, while nearly half the population do not own a home.
In China, in recent years, housing prices have been continuously high. For ordinary people, buying a house in a big city in China is a far-away dream.
According to British consulting firm Knight Frank, Seoul, Singapore, Tokyo, Shanghai and Taipei - the business hubs of the region - have seen house prices skyrocket over the past year, despite a decline in overall consumption. Knight Frank's data shows that real estate prices in Seoul increased at the highest level in Asia, by 22.3% between late 2019 and 2020. This is believed to be the result of the Korean government's new regulations for the real estate rental market, thereby boosting the demand for houses.
In March last year, the city of Shanghai, China, tightened management of the real estate market with an increase in the time allowed to sell houses to five years for houses that enjoy preferential policies. The city also limits the transfer price of land for housing development.
Shenzhen, China, has implemented many measures to prevent illegal money flowing from consumer and business loans into the real estate market. This move is aimed at preventing excessive speculation in the real estate market.
In early 2021, Beijing also announced that it would strengthen control of improper loans to buy houses. Similarly, Guangzhou introduced a series of measures such as raising mortgage rates on loans to buy first and second homes by city residents to curb speculative demand.
Meanwhile, in Singapore, the government warned about the real estate fever and the situation of people get loans to buy real estate. One of the other measures of Singapore to control real estate prices is to adjust the loan limit of the Housing and Development Authority of Singapore (HDB) from 90 to 85% of the total property value. Loans from organizations other than HDB remain at 75% of the total asset value.
Commenting on the recent "land fever" in Vietnam, Mr. Nguyen Manh Khoi, Deputy Director of the Department of Housing and Real Estate Market Management (Ministry of Construction), said there are many reasons leading to the situation, including the lack of information.
In fact, when people lack information about planning and land use plans, especially projects under survey or preparation phases, it is easy for land brokers or traders to blow up land prices to seek profit.
To deal with the problem, one of the solutions is to provide sufficient information about housing projects and land use planning to people, Khoi said.
One of the measures to prevent “land fever” proposed by the Vietnam Association of Realtors (VARs) to the Ministry of Construction and the Government is also to promote information disclosure of land use planning data.
Mr. Mathew Powell, Director of Savills Hanoi, said that the digitization of information related to land brings benefits in controlling land information, to ensure transparency of information.
Specifically, it is necessary to establish the national data on land prices - where all information about land is stored on a digital platform. When everything is controlled by the Land Registry Authority, national digitization of land transactions will create a more transparent perspective, he said.
Currently, land and housing prices are being pushed up based on false or misunderstood information. This has led to confusion in prices and some people will make wrong investment decisions based on incorrect information.
“Therefore, a data source, where information is publicly available and accurate, will allow the real estate market to function stably and minimize price spikes,” said Savills Hanoi Director.
In Vietnam, 2021 was a year of land fever.
Land fever has attacked not only large cities but also rural areas, leaving young people without hope of buying a house.
Blockchain technology, which has become a tool for information storage and security, is not only known in the field of virtual currency but also in other business fields.