Trading floor to make land use rights market transparent: experts

Prime Minister Pham Minh Chinh has just directed the Ministry of Natural Resources and Environment to coordinate with the Ministry of Construction to consider the establishment of a land use rights trading floor, and report to him before August 15.

The establishment of such an exchange will help the land use rights market operate in an open, transparent, healthy and sustainable manner, said experts.

The exchange aims to institutionalize Resolution 18 adopted by the Party Central Committee at its plenum on June 16, 2022, which sets guidelines for continued perfection of institutions and policies to improve the effectiveness and efficiency of land management and use, creating a driving force to turn Vietnam into a high-income developed country.

This is positive news for the real estate market as the exchange will ensure transparency and a clear legal framework to protect players, said experts, adding that the trading floor will also help state management agencies to capture accurate land information, thus easily determining the land prices and minimizing losses.

However, many people said that it is necessary to have a specific and suitable operating mechanism for players in line with market realities.

Lawyer Tran Minh Cuong from the Ho Chi Minh City Bar Association said he fully supports the establishment of a land use rights exchange. Through the trading floor, the state can fully grasp information about the land use rights market, thereby making timely policies that suit the actual situation.

"Concerns about inadequacies when land use rights transactions must be conducted via the exchange are well-founded. But, the problems will be solved when the government stipulates the role and responsibilities of the exchange in providing information and protecting the interests of the parties involved while making a transaction," said Cuong.

Meanwhile, Nguyen Dinh Tho, director of the Institute of Strategy and Policy on Natural Resources and Environment under the Ministry of Natural Resources and Environment, said that the 2013 Land Law already outlines institutions for the primary market between the state and related parties through regulations on land use planning, allocation and land lease for investor selection, and allocation of land in the form of transparent public auction. It also determines specific prices when the state allocates land with a land use levy, rent, or purpose change permit.

He explained that perfecting the institutions for the secondary market among the players means completing regulations on the rights of land users, reforming administrative procedures in the exercising of rights, promoting the issuance of land use certificates to put land onto the market, establishing a land valuation consultancy mechanism, and perfecting public service organizations to support the operation of the market.

It is necessary to have specific regulations on investment, housing, real estate business, secure transactions, and especially mortgages for future-firmed properties and the handling of debts by trading companies in order to create a full legal framework for the real estate market, Tho stressed.

However, he noted there are still some obstacles facing the development of the land use rights transaction market. For example, many transactions are not registered and the transaction price is not the same as the actual transfer price.

Other problems are land speculation and occupation, slow use of land, and difficult settlement of mortgaged properties, he added.