Vietnam mulls ban on unfinished home sales

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The Ministry of Construction has proposed a new rule that bans project developers to sell land and half-built houses to customers.

Residential property developers must finish construction before being allowed to sell their projects, the rule said.

In its latest report on the real estate market, the ministry found that many people cannot afford a house while some others have been leaving their houses unfinished and unoccupied for a long time, which it said is a waste of land resources.

An inspection of 18 residential projects in Hanoi found that only 80 percent of townhouses and 50 percent of villas were put into use, according to the report.

The Ministry of Construction said it is necessary to control bank loans to real estate projects, especially in the high-end market segment. Uncontrolled credit to luxury housing and resort projects can cause the market to collapse, the ministry warned.

It said there is already an oversupply of luxury housing products. The market, however, still need more houses of reasonable prices and houses for rent.

According to the ministry, the government also needs to gradually eliminate cash payments in real estate transactions to ease pressure on cash liquidity and reduce risks for all parties involved.

Around 2,500 real estate projects are under development in Vietnam. Ho Chi Minh City alone has 1,400 projects with a total construction area of 4,490 hectares.

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