The attachment of electronic real estate identification codes is considered one of the important steps in the process of completing data infrastructure and making the real estate market transparent.
Lao Dong Newspaper reporter had an interview with Dr. Tran Xuan Luong - Deputy Director of the Institute for Research and Evaluation of the Real Estate Market (VARS IRE) - to clarify the expectations as well as the challenges posed in the implementation process.
Sir, to what extent will the fact that each real estate has its own identification code improve the transparency of the market?
- From an expert's perspective, I agree with the policy of issuing separate identification codes for each real estate. This is a common practice in developed countries, because to manage it, there must be data and to have data, it is mandatory to identify each asset.
Real estate is a valuable asset, existing for a long time, so a "identity card" is needed to track the entire legal life cycle and transactions.
Not only stopping at identifying assets, the encryption of each real estate is also the foundation for digitizing the entire market management process. For many years, the regulation of the real estate market has faced many difficulties due to scattered, unsynchronized and difficult-to-track data. When each asset is tagged with an identification code and put into a unified digital data system, all information about legal matters, transactions, prices or market fluctuations can be monitored transparently and continuously. From a certain perspective, this encryption mechanism is like a "golden hoop" for the real estate market, helping to establish data discipline, limit information gaps - which are conditions for speculation, price inflation or market manipulation.
In fact, managing real estate and the real estate market is extremely difficult. In addition to physical information such as location, area, current status, information about prices - the core factor of the market - is even more difficult to grasp.
Without reliable data, many regulatory policies, even if correct, are difficult to be effective in practice.
Therefore, when each real estate is encrypted and identified associated with a unified database, issues of asset identification, transaction tracking, price formation and information transparency will basically have a platform to solve.
If implemented substantively, this is not only an administrative management tool, but an important step forward to help the State understand the market correctly - and when it understands correctly, it can regulate effectively, and at the same time help the market operate more transparently and sustainably.
Are identification codes and data interconnection mechanisms sufficient to reduce speculation and price inflation - especially in the land plot segment and areas that have experienced virtual fever?
- There is a good basis to expect that. Because the nature of speculation, price inflation or creating "virtual fever" is mostly based on lack of transparency and information breakdown.
When each real estate is granted a unique identification code and all data is interconnected, legal information, transaction history, transaction price, transfer status... are all recorded and traced. At that time, the subjective factors of humans are very difficult to intervene to create false information or "lead" the market as before.
In particular, when transactions are digitized, the transaction value is fully recorded, and progresses to public disclosure at an appropriate level, then the declaration of double prices, concealing real prices or creating virtual price levels will gradually be narrowed down. This is also an important basis for implementing fair tax policies, and at the same time helps management agencies monitor market developments in real time, thereby having timely regulatory measures.
It can be said that identification codes and interconnected databases are not a "magic wand" that completely eliminates speculation, but they will lose the favorable environment for speculation. When the market operates on a transparent data platform, all manipulation behaviors will be more difficult, higher risks and therefore will naturally be limited.
This is a very important foundation for the real estate market to operate healthily and approach the standards of developed countries.
In the early stages of implementation, do you predict that the market may slow down due to waiting psychology, legal review, or unsynchronized data?
- That's right. The real estate market is a market with very high sensitivity to policies, especially policies that directly affect transparency and monitoring capacity such as the issuance of identification codes this time. In the initial stage of implementation, the possibility of the market stagnating is predictable.
The reason is not only in technical factors such as data cannot be synchronized immediately, requiring time to review and standardize, but also from psychological factors. When real estate is identified, all information about assets, the number of real estate held by a subject, as well as transaction cash flow will gradually be recorded and traceable. This makes a part of speculators tend to be more cautious, even temporarily withdrawn or eavesdrop, because the advantage of information is no longer as before.
In addition, in the context that monetary policy for the real estate sector is still being tightly controlled, the implementation of identification creates a "double effect" - both tightening cash flow and tightening data transparency. This may affect market liquidity in the short term.
However, in the medium and long term, this is a positive sign. Because this process will contribute to market screening, reducing purely speculative transactions and creating a foundation for the market to develop more transparently, stably and sustainably.
A market may slow down in the short term but will be healthier in the long term.
From a long-term perspective, how can this regulation change the way of transactions, valuation and the structure of the Vietnamese real estate market? Can this be the foundation for a more transparent digital transaction ecosystem?
- It can be said that encryption - identification - pricing - tax identification and market orientation are an inevitable logical chain. And if fully implemented, this will be the foundation for forming a transparent digital real estate ecosystem, where transactions, management, pricing and regulation all operate on a data platform.
This is also an important condition for the Vietnamese real estate market to develop professionally, healthily and approach international standards in the long term.
Thank you for the interview!
