Authorities will inspect property firms this week and fine those setting their prices in US dollars, a central bank official said.
Nguyen Hoang Minh, deputy director of the central bank branch in Ho Chi Minh City, said it is illegal for all individuals and enteprises except banks to trade, make payments or list prices in foreign currencies. Real estate trading in US dollars is therefore illegal, he said.
Many real estate companies violating this regulation have been reported to the central bank and they will be inspected first, Minh said.
Developers, not sellers, will be fined as they are the ones who decide on payment policies, he added.
Bui Tien Thang, deputy general director of Sacomreal, the real estate trading arm of Sacombank, said there are many reasons why developers often have prices quoted in US dollar but the main reason was that a property project is often planned and financed with the foreign currency. If developers set their selling prices in the dong, they can suffer losses when the dollar gets stronger, he said.
Exchange rate-related risks are thus passed on to buyers. Many homebuyers have to pay for properties in dollars, mostly for luxury villas and apartments, and face payment difficulties caused by rising exchange rates.
An official of the HCMC Real Estate Association said the association has many times warned member companies against quoting prices in US dollar.
So far the authorities have focused on inspecting the commodities sector, not the service sector, the official said, noting that a maximum fine of VND30 million on violators was also too low to be an effective deterrent.