Manipulation poses threat to real estate market: legislator

Manipulation of the real estate market should be strictly banned as it is no less dangerous than stock market manipulation, said Trinh Xuan An, a legislator representing the southern province of Dong Nai, on Tuesday.

Commenting on the draft Law on Real Estate Business at the ongoing session of the National Assembly, Vietnam's highest-level legislative body, An said the Penal Code already has regulations on the manipulation of the stock market but does not have the same for the property market.

“Manipulation in the real estate market has become very sophisticated, leading to bubbles and sky-high prices. Therefore we need specific regulations to eliminate the act," the delegate said.

According to the lawmaker, this tactic includes bidding at high prices and then giving up deposits, and using the price of one project to boost the price of another.

“If we do not handle this properly, it will create bubbles and even incidents similar to the collapse of Evergrande in the Chinese market,” he stressed.

Sharing the same opinion, legislator Trinh Lam Sinh representing An Giang province in the Mekong Delta region, asked the drafting committee to add regulations on manipulation of the real estate market to avoid chaos. He noted that in recent times, manipulation has destabilized the property market, affecting the country's socio-economic development.

According to parliament member Nguyen Huu Thong representing the central province of Binh Thuan, it is necessary to clarify the act of collusion in auctions of land use rights to inflate land prices in surrounding areas. This has become common and makes it difficult for people with a real need for housing and real estate.

However, the National Assembly's Standing Committee stated in its report that a real estate bubble can be caused by many factors, including business strategies of developers and the state's policies towards the market. There are no criteria to determine property speculation in reality. Therefore, trying to prohibit speculation is inappropriate.

Lawmakers also proposed all real estate transactions be conducted via bank transfers to prevent corruption and tax evasion.

They held that current regulations do not require property payments to be made through banks, resulting in tax evasion, negativity and corruption.

The Vietnamese real estate market began to record more bright spots in the third quarter of 2023, with transactions improving month-on-month and quarter-on-quarter, according to the Vietnam Association of Realtors (VARS).

The number of transactions across the market has gradually increased. In Q2, the market recorded 3,700 transactions, an increase of 37% from Q1. In Q3, the figure hit nearly 6,000, 1.5 times more than Q2 and over two times higher than Q1.

However, in the nine months, the number of new transactions was only about 50% compared to the same period in 2022 and about 20% of the figure in the period of overheated development due to a lack of social and affordable housing.