Property firms to get houses in order

Nguyen Hoang Minh, deputy director of Ho Chi Minh City’s State Bank branch, said the branch would examine real estate firms using US dollar quotations.

“We have cooperated with market monitoring officials to examine the quotation in foreign currency of enterprises and the investigation will be continued especially for foreign-invested real estate enterprises,” said Minh.

Late last month Phu My Hung Corporation in Ho Chi Minh City was the first foreign-invested real estate enterprise in Vietnam to be fined VND8.5 million ($447) for illegal quotations in foreign currencies. 

Local company Hoang Quan Consulting – Trading – Services Real Estate Corporation was the second one fined last week.

Many other developers have quoted prices in US dollars but have not been fined.

Quoting real estate prices in US dollars violates foreign exchange management laws. The State Bank in September required its branches in Hanoi and Ho Chi Minh City to investigate the illegal price quotations by real estate developers.

Hanoi’s central bank branch has yet to fine any firms. A source at BIDV Tower Joint Venture Company, which is operating the BIDV tower in Hanoi, said the company had followed the new rules.

“Basically, quotations in Vietnamese dong have not changed the value of contracts. We used to quote in foreign currency to gain a stable profit in the long-term due to forex rate fluctuations,” said the source.

BIDV Tower is a Grade A office building which has filled 80 per cent of its space and is expected to have tenants for 90 per cent of its office space by the year’s end.

Forcing developers and investors to quote in Vietnamese dong is not new, however, it has largely been ignored.

Decree 202/2004/ND-CP dated December 10, 2004 stipulates administrative sanctions applicable to monetary and banking operations, with fines from VND5 million to VND12 million applied for US dollar quoting violations.