Vietnam’s real estate market is classified among ones with low-transparency, taking the 68th position out of 109 countries, according to JLL’s 2016 Global Real Estate Transparency Index.
However, the market has shown signs of improvement during the past two years. Vietnam was classified as a country with low-transparency in 2014 and in 2016 the country is considered “on the cusp of Semi-transparent.”
Improvement in real estate market is observed in various aspects, from clearer provincial planning information, investment procedures and better project information provided to buyers, or tenants, this provides reassurance for end-users, said Trang Le, manager of research and consulting at JLL Vietnam
According to the World Bank
, albeit continuous improvement in land information disclosure, Vietnam still requires more progress.
In July 2016, the World Bank approved the $150 million Vietnam Improved Land Governance and Database Project, which will develop an information system and land database and make it available to both the government and the public.
This credit package will help to speed up the renovation in land monitoring processes, investment procedure as well as providing project information that ultimately will enhance the Vietnam investment climate.
JLL acknowledged some notable improvements in the residential market, with numerous policies, regulations in terms of transparency being been implemented in recent years.
“These collectively are being seen as positive actions to promote the transparency to the market. Notwithstanding those actions, the process has not been carried out in an effective way due to lack of synchronization, consistency and lack of implementation and monitoring,” Trang Le noted.
With the development of advanced technology and an influx of capital into Vietnam’s real estate market, transparency will need further enhancement in future.
Sophisticated technology will provide a better tool to improving market transparency and the strong influx of capital will push the demand for transparency to a higher level than previously seen.
However, implementation of a fully transparent system as seen on more mature markets will be a time-consuming process that will require considerable time and effort from all parties stakeholders, Trang Le stressed.
The Global Real Estate Transparency Index is a biennial survey by JLL and LaSalle Investment Management. The 2016 edition analyses 109 markets, created from 139 factors.