The Vietnamese Ministry of Construction has requested the people’s committees of provinces and centrally-run cities to strengthen the management of the domestic real estate market, controlling the risks of a property market bubble.

Deputy Minister of Construction Nguyen Van Sinh said that, due to the pandemic and long periods of social distancing, many economic fields have been affected, including the real estate market.

In the new normal situation, the real estate market has recovered significantly with a trend of increasing transaction volume and real estate prices. However, the development of the real estate market is not sustainable and the market still faces risks.

Many organisations, individuals and businesses have violated regulations relating to the property market, according to the ministry. Data on the real estate market is incomplete and lacks transparency. Some enterprises are conducting real estate business, though they do have legally have the license to do so.

In some localities, there have been illegal real estate transactions, including the sale of plots on agricultural or non-agricultural land. This has affected the socio-economic development of the real estate market.

There are some cases of land auctions with the winning prices being many times higher than the offering price, causing negative impacts on the housing and real estate market, the ministry said.

Therefore, the ministry has proposed the people’s committees of the provinces and centrally-run cities focus on reviewing and inspecting land auctions.

Localities also need to review their real estate markets and the potential risk of “bubbles” or other unusual developments. They must forecast the future of the real estate market and implement tasks and solutions to promote stable and healthy developments of the real estate market.

The localities should also strengthen management, supervision and inspection of the property market to prevent rumours from spreading, according to the ministry.

It is imperative that they strictly handle violations in real estate brokerage and trading activities, real estate projects and land-use rights. They must especially promote control of real estate projects that do not meet legal procedures and strictly handle projects that have offered products on the market.

The ministry has also requested localities publicise information on the planning and building progress of infrastructure development projects and real estate projects, as well as the merger and establishment of local administrative offices.

They must monitor the property market development and have measures ready to stabilise the market, preventing real estate prices from rising too high and the risk of a property bubble.