Several days ago, the second stage of the Vista apartment project in an elite area was launched. Hundreds of people registered and paid US$2,000 deposits for apartments that only exist in blueprints.

Did these sales really reflect the city dwellers housing needs? We spent several days observing the fierce rush for Vista apartments and found that speculation was omnipresent. It was a chance to make huge money, but for rich people only. Of course they needed to act quick to grab one or several apartments. But then they could sit back and enjoy observing the prices rising daily.

CapitaLand, Vista’s developer, was earning big money too. In June it offered to sell Vista apartments at $1,600 per square meter. Four months later, in the same project, the investor could increase the price up to $2,500-3,100 per square meter.

What a hot business

Let us make a simple calculation. CapitaLand pays US$40 million for the land and construction of 750 apartments, each of which is sold at about US$300,000 on average. The profit could be as high as US$180 million.

Meanwhile the housing policy for regular people does not seem to work. To a majority of urban citizens, having their own home, even one as cheap as VND200 million ($13,000), is still a wild dream.

Professor Dang Hung Vo, a former deputy minister, recently told Thanh Nien about the urgent need of an appropriate tax policy that could help regulate the real estate market. Such a tax regime has been discussed for quite some time but nothing concrete has been done. Speculation is still strong and thriving. The rich control the properties while the poor bitterly see land, which is constitutionally “owned by the people”, always beyond their reach.

The real estate market is out of control. This year alone has witnessed two price hikes, the latter stronger that the former. Investors and speculators could inflate the prices when-ever they want applying “tricks” like selling just a small number of apartments at a time, increasing the prices every time they introduce new lots on the same projects, and exaggerating project information.

It is now high time that the government made efforts to correct land and house prices, for which a new tax policy seems an optimal solution. Otherwise, the social and economic consequences will become more serious and harder to deal with.

Source: ThanhnienNews.