Illustrative image. (Photo: SGGP)
It is worth mentioning that HPG's revenue does not come from real estate. In the list of Vietnamese billionaires ranked by Forbes Magazine, the owner of HPG is a US dollar billionaire but a rare one whose income comes from production and business activities instead of real estate. In neighboring countries with great development, like Singapore, the country's wealth does not come from the land; or Thailand, in the list of ten richest billionaires, no one comes from the real estate sector. As for the world perspective, at present, the prosperity of countries or global corporations does not come from real estate.
Meanwhile, in Vietnam, the measure of wealth is real estate. The land fever has happened recently in many regions, causing the society to be turbulent. People rush to participate in the land fever because land brings wealth easily and quickly. However, the attractiveness of the land has left many negative sides, and the social picture has been unveiled clearly: many officials were imprisoned; the money of the society is buried in real estate, waiting for prices to climb to make a profit. Thus, the resources for investment in production and business activities for the country's development are compromised.
The State always calls for the direction of capital flows into production and business activities. However, like a communicating vase, every time a loan interest rate is lowered, land fever appears. This vicious circle has existed for decades. With such an operational way of the economy, Vietnam has gone against the development trend of the world. Frankly speaking, the contribution of land to the economy is extremely modest. According to the Ho Chi Minh City Tax Department, budget revenue from real estate trading activities in ten years, from 2011 to 2020, reached VND125.27 trillion, accounting for only 4.26 percent of the city's total budget revenue. The development of the housing market is out of phase with the supply and demand, with the proportion of high-class houses outnumbering that of low-end ones. According to the Department of Construction of HCMC, in 2020, the rate of affordable apartments was only 1 percent, whereas the high-end segment skyrocketed to 42.1 percent. In short, with such development, real estate does not bring harmony to the development of society.
Certainly, for the country to develop sustainably, it must rely on production and business activities, as well as high-tech industries. It is necessary to eliminate the problem of real estate speculation to mobilize resources for the economy. It includes tightening the approval of commercial housing projects, complying with the planning as well as the needs of society, and legal transparency. Capital flows into real estate must be strictly controlled, with strong sanctions for improper use of capital. Progressive taxation should be levied on people owning more than one property. Next, it is essential to tighten the declaration of real estate transfer tax and strictly handle fraud.
Along with the solution to tighten speculation, it is necessary to issue a series of stimulus policies to encourage the development of social housing, such as sharply reducing interest rates, increasing profits for investors, deeply cutting interest rates, and extending the repayment period for homebuyers. At the same time, authorities should make the planning of large-scale social housing clusters and organize convenient transportation for jobs, as well as people's daily needs. This approach will regulate housing demand, reducing housing prices.
By adopting such a combination of solutions, the country will have a basis for directing capital flows into production and business activities, promoting the country's economic development resources.
Meanwhile, in Vietnam, the measure of wealth is real estate. The land fever has happened recently in many regions, causing the society to be turbulent. People rush to participate in the land fever because land brings wealth easily and quickly. However, the attractiveness of the land has left many negative sides, and the social picture has been unveiled clearly: many officials were imprisoned; the money of the society is buried in real estate, waiting for prices to climb to make a profit. Thus, the resources for investment in production and business activities for the country's development are compromised.
The State always calls for the direction of capital flows into production and business activities. However, like a communicating vase, every time a loan interest rate is lowered, land fever appears. This vicious circle has existed for decades. With such an operational way of the economy, Vietnam has gone against the development trend of the world. Frankly speaking, the contribution of land to the economy is extremely modest. According to the Ho Chi Minh City Tax Department, budget revenue from real estate trading activities in ten years, from 2011 to 2020, reached VND125.27 trillion, accounting for only 4.26 percent of the city's total budget revenue. The development of the housing market is out of phase with the supply and demand, with the proportion of high-class houses outnumbering that of low-end ones. According to the Department of Construction of HCMC, in 2020, the rate of affordable apartments was only 1 percent, whereas the high-end segment skyrocketed to 42.1 percent. In short, with such development, real estate does not bring harmony to the development of society.
Certainly, for the country to develop sustainably, it must rely on production and business activities, as well as high-tech industries. It is necessary to eliminate the problem of real estate speculation to mobilize resources for the economy. It includes tightening the approval of commercial housing projects, complying with the planning as well as the needs of society, and legal transparency. Capital flows into real estate must be strictly controlled, with strong sanctions for improper use of capital. Progressive taxation should be levied on people owning more than one property. Next, it is essential to tighten the declaration of real estate transfer tax and strictly handle fraud.
Along with the solution to tighten speculation, it is necessary to issue a series of stimulus policies to encourage the development of social housing, such as sharply reducing interest rates, increasing profits for investors, deeply cutting interest rates, and extending the repayment period for homebuyers. At the same time, authorities should make the planning of large-scale social housing clusters and organize convenient transportation for jobs, as well as people's daily needs. This approach will regulate housing demand, reducing housing prices.
By adopting such a combination of solutions, the country will have a basis for directing capital flows into production and business activities, promoting the country's economic development resources.
