According to official figures, HCMC earned VND27.17 trillion of budget collections from land in 2017, equivalent to 11.75% of the city’s total budget revenue. Of which VND17.9 trillion, or around 66% of the amount, was collected from land use fee paryment for real estate developments.
In 2018, HCMC’s domestic budget collections hit VND268.78 trillion, with land-related revenue accounting for an estimated VND22.6 trillion, and payments of property projects contributing to over 61% of the total amount.
Experts predict a tough year for HCMC real estate market. (Photo: Shutterstock)
Thus, land-related budget collections shrank by 16.8%, or about VND4.57 trillion, while collections from property projects declined 22.5%, equivalent to VND4.04 trillion. As of November 30, 2018, budget revenues from individuals and enterprises were recorded at VND3.013 trillion.
Experts say the downward trend may continue in 2019. The size of the property market also witnessed a considerable decline last year.
Particularly, in 2017, ninety-two housing projects are under construction, with 42,991 units, including 5,489 low-rise houses and 37,502 apartments. The high-end, mid-end and low-end segments accounted for 25.5%, 45.5% and 29%, respectively.
In 2018, seventy-seven housing projects provided 28,316 units, making market scale declining by over 34% against 2017. The respective proportions of each market segment were 30%, 45.3% and 24.7%.
Experts believe these figures indicate unsustainable market development this year. In fact, the real estate market’s development is only sustainable when it records a reasonable product structure, with the largest share going to the low-end segment, followed by the mid-end and high-end segments.
These are all worrying signs, said Chairman of the Ho Chi Minh City Real Estate Association (HoREA) Le Hoang Chau. The property business in the city has been in trouble until early 2019. Along with limited new projects, other projects that were approved years ago now need putting under review.
Experts reveal one of the reasons for slump of housing supplies in the past and this year concerns the procedures for investment approval. In addition, this may lead to declining budget revenues this year, affecting to not only real estate firms but also businesses in some 95 other sectors.
Recently, HoREA proposed amendments to the laws on housing and land to ensure the consistency of the legal system with regard to investment approval, investor selection and approval.
