Despite construction progress, even ahead of schedule, many real estate businesses cannot sell their products because the projects do not meet legal requirements.
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| Kim Oanh Group's Mega City project in Ben Cat City is waiting for authorities to appraise land prices. (Photo: VD) |
Excited to return to the market
The real estate market is entering the final stage of the year. Accordingly, many businesses are accelerating to close sales for the whole year. This is proven by the fact that many investors are launching new products, and trading floors are also starting to recruit staff to distribute products.
For example, recently, Quoc Cuong Gia Lai Joint Stock Company reopened the reservation basket for 400 apartments of the Lavida Plus Project in District 7 (HCMC), expected to officially open for sale this September with a price of about 45 million VND/m2.
Meanwhile, Nam Long Group announced the opening of a new phase of the high-rise subdivision in Mizuki Park Urban Area in Binh Chanh this month.
In Long An, Seaholdings Real Estate Joint Stock Company and Phuoc Thanh Construction Joint Stock Company have officially joined hands to implement the Destino Centro Project. Accordingly, the project is expected to be built in 2024, providing more than 2,000 modern apartments with diverse types, from 1-bedroom apartments to 3-bedroom luxury apartments, along with 10 commercial service apartments.
In addition, the real estate market also welcomed the return of many names after a period of restructuring. Typically, Novaland started construction, completed and handed over products in many projects, such as Aqua City (Dong Nai), NovaWorld Phan Thiet (Binh Thuan), NovaWorld Ho Tram (Ba Ria - Vung Tau) ...
The handover of houses at the projects helped Novaland record net revenue of nearly VND1,900 billion in the second quarter of 2024, up 37% over the same period last year. The company said it will continue to complete and hand over a total of 2,600 products in the last months of 2024.
For example, Phat Dat Real Estate Development Joint Stock Company has just been assigned an additional 15.8 hectares of land in Bac Ha Thanh Urban Area in Tuy Phuoc District (Binh Dinh Province). To date, this project has been assigned 90% of the land. The company is speeding up the completion of land use fee calculation and construction to be eligible to open the project for sale in September 2024.
Waiting for legal solutions
In contrast to the enthusiasm to return to the market with new movements, many businesses are "restless" when the project is still "stuck" legally.
For example, in Binh Duong province, Phu Dong SkyOne Project of Phu Dong 5 Investment Company Limited has completed the construction of the tunnel cover ahead of schedule to build the body. However, the company has not been able to open for sale because it has not fulfilled its financial obligations and paid land use fees as prescribed.
Similarly, the Tan An Apartment Project with the commercial name Tecco Luxury, invested by Tecco Southern Corporation Joint Stock Company, has been granted a construction permit for a long time. The project has also been built by the investor. However, up to now, this project is only on the list of invitations to hire a consulting unit to determine land prices. However, choosing a consulting contractor to determine specific land prices is not an easy task.
Specifically, on April 10, 2024, the Department of Natural Resources and Environment of Binh Duong province invited 29 bidding packages to determine land use fees at 29 real estate projects. Among them, there are projects such as Mega City in Ben Cat City of Kim Oanh Group that need to be appraised with 24.6 hectares of newly allocated and adjusted land; Binh Minh Residential Area (Ben Cat City) of Binh Minh Real Estate Company that needs to be appraised with 29 hectares of various types of land; Quang Phuc 3 Residential Area (Bac Tan Uyen District) of Quang Phuc Housing Company that needs to be appraised with 8.6 hectares of various types of land.
Previously, in early March 2024, the department also approved a plan to select contractors for 29 consulting packages to determine specific land prices at real estate projects, with a total value of the packages of 3.2 billion VND.
Some projects on this list include Tecco Luxury Apartment (Thuan An City) of Tecco Southern Corporation Joint Stock Company; Thuan An 1 and Thuan An 2 Residential Areas of Phat Dat Real Estate Development Joint Stock Company; A&T Sky Garden Apartment (Thuan An City) of A&T Binh Duong Urban Development Investment Joint Stock Company...
The list of real estate projects in Binh Duong waiting for land price determination is getting longer and longer, and every 2-3 months, the Department of Natural Resources and Environment of Binh Duong province opens a bidding once. Many projects have been put up for bidding since 2022, but to date, no consulting unit has been selected.
The delay in calculating land use fees has disrupted the business plans of many businesses, because this is the most important step for businesses to calculate the selling price of their products. At the same time, this is also a necessary procedure for businesses to be able to organize sales. If they sell products in advance, it is against the law and even if they sell products, they cannot sign sales contracts with customers...
In a recent event, Ms. Duong Thanh Thuy, Vice President of Trung Thuy Group, frankly shared that the blockage of mechanisms and policies is one of the key reasons why businesses are facing difficulties. Using a specific story at Trung Thuy Group as evidence, Ms. Thuy said that no project of this enterprise has been developed for less than 7 years, and there are even projects that she has to spend "a third of her life" to pursue.
“One of our projects in Ho Chi Minh City, although the 40th floor has been topped out and is expected to be handed over by the end of this year, has not yet been opened for sale. The reason is that, for the past 8 years, no agency has decided on land valuation, even though the Company has submitted documents to pay land use fees,” Ms. Thuy shared.
According to experts, the problems that real estate businesses are currently facing are mainly related to legal issues (about 70%). There are projects that have been stuck for decades without being completed. Therefore, relevant agencies need to soon have a land valuation plan for local application, and at the same time shorten the process to support businesses.
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