Hundreds of real estate projects in Ho Chi Minh City have been delayed by cumbersome administrative procedures and the authorities’ temporary halt on project approval.
More than 100 real estate developers have met Ho Chi Minh City authorities to complain about slow licencing process.
In a recent meeting with municipal Communist Party Committee, Quoc Cuong Gia Lai Joint Stock Company general director Nguyen Thi Nhu Loan claimed that all the 12 projects of the company with total land bank of 150 hectares were facing delays.
Among them, one 3,000-square metre project in the outlying district of Nha Be has been struggling to get permission over the last two years. “The application went around from one department to another, but they were afraid of wrong-doing and left the application unresolved,” said Loan.
Loan said it took long time for the company to provide evidence the project’s site was not public land, an issue that has caused a bottleneck in licencing real estate projects in the city as municipal officials were cautious of approving following the arrest of some senior officials.
Nguyen Van Duc, deputy director of Dat Lanh Real Estate Company, said it took the company 18 months to clear procedures to pay additional land use levy.
“With the current prolonged administrative procedures related to land, businesses will no longer want to make low-cost housing accommodations because the cost of waiting is too high”, said Duc.
Nam Long Investment Joint Stock Company chairman Nguyen Xuan Quang added that delays in project licencing had caused a lack of property supply, leading to higher housing prices and forcing businesses to move to neighbouring provinces for investment.
The slow administration process has not only worried local real estate developers but also foreign investors, who have started to be anxious about financial risks, said Bui Xuan Huy, CEO of Novaland Group.
Huy expressed his concern that the city was losing its golden opportunity to attract foreign investors.
Tran Vinh Tuyen, vice chairman of Ho Chi Minh City People’s Committee acknowledged all the difficulties that businesses have to face with, claiming the municipal authorities have worked with Government Inspectorate to thoroughly tackle.
Ho Chi Minh City Communist Party chief Nguyen Thien Nhan asked for clearer administrative procedures in the field of construction and planning that will set a timeline for licencing process.
Nhan requested directors of departments to actively find solutions for real estate businesses instead of leaving their employees not knowing how to solve problems because they aren’t clear about licencing procedures.
Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association said that the municipal authorities had allowed 124 property projects that were previously suspended, to move ahead. However, he asked the the list of the projects to be made public.
According to CBRE, the city’s condominium market was quiet in the first three months of 2019, with new launch dropped significantly due to long Tet holiday and slow licensing process.
“The number of newly launched projects was lowest in the last three years, with only 12 projects, including both new project lauching first phase and old projects launching subsequent phases,” the latest report from CBRE reveals.