Experts have said that the government should acknowledge the significant role developers play in the real estate market and in city planning
The Sun Avenue residential project in District 2, HCM City (Photo: VNA)
Dr Huynh The Du of Fulbright University Vietnam, speaking at a recent workshop on the role of developers in Ho Chi Minh City’s real estate market development programme, said the government has a limited role to play in setting the scene and developers should be the ones to lead the market as they know what projects need to be built and where.
One developer said the city’s urban planning is not done in an effective way at the moment. Even the person who approves [housing] projects does not really have a clear idea of what they are doing.
Yet to some extent developers have to rely on the master plan, she added.
Du said the government has the role of regulating the market.
Prof Richard Peiser from the Graduate School of Design at Harvard University in the US agreed that developers have a big role to play.
Often city leaders think they are the ones that lead the market and can set the context and the playing field, but developers are the ones who take the risk and someone has to take the risk, he said.
Developers are the key because they are the ones who tidy up the land, bring the capital and have the responsibility of having the project built, he said, adding that they are at the centre of making it happen.
But he also said one of the key ingredients for a vibrant and competitive real estate market is proper regulation by the government.
To promote the development of the real estate market, the government should also try not to limit the participation of FDI investors since they bring capital, promote competition and improve design standards in the market, he said.
Asked how local developers can compete with international players who are from more developed markets if the government opens the doors wide to FDI investors, he said: “Real estate is a very local business and local developers always have better information and certain natural advantages.”
Maybe in big projects local developers would be somewhat at a disadvantage, so it is appropriate that the Government requires a certain amount of legislation to better monitor the market, he said.
Some protection is good but in general it should not keep out foreign investors, he added.
Last year foreign investment in real estate amounted to 8.5% of the city’s total FDI of US$3.05 billion.