In order to heighten the transparency of the real estate market, MOC has drafted the regulation on apartment classification and recognition. The classification would be done based on a series of criteria to be set by MOC.
Apartments can be classified as ‘A’, ‘B’, or ‘C’ with ‘A’ being the highest ranking. An apartment would be recognized as ‘A’ class if it gets 90-100 score. ‘B’ would be given to the apartments with 80-89 score, while ‘C’ would go to the apartments with less than 80 score.
Stephen Wyatt, CEO of JLL Vietnam, an international real estate consultancy firm, noted that the draft regulation has not used anywhere in the world.
In other countries, there are no common standards to be applied for the whole market. In general, it is real estate consultancy firms which announce their ranking criteria.
The prices of apartments can show the quality of apartment blocks, while the market operates in accordance with the demand & supply basis. Meanwhile, government agencies are responsible for controlling technical standards and legitimacy of apartments to ensure that real estate products come in line with the overall development programs of the countries.
Mai Thanh Truc, Business and Finance Director of Nam Bay Bay, noted that the ranking would help buyers find apartments they want and can afford. The ranking could be referred to when defining the value of apartments and apartment blocks.
However, Stephen Wyatt of JLL Vietnam, thinks that while the policy would help create investors’ confidence and improve transparency, it would not have strong influences to the market, because this would not lead to changes of this nature, but it would only help improve management.
It would not be easy to apply the regulation in reality, because real estate products vary in designs and ideas. If architects are constrained to follow criteria for ranking, their creativity would be badly affected.
An analyst said that MOC once issued a circular on classifying apartments, but it could not be implemented because of problems in setting up criteria and measurement.
He warned that real estate developers, which complain about complicated investment procedures, may not feel satisfied as they would have one more procedure to follow.
Truc said he fears that the ranking may lead to a ‘high-end apartment’ race which would affect the real value of products and developers’ prestige.