Tóm tắt Luận án Building indicators kit for real estate market (applied in the capital of Hanoi)

1 PREAMBLE 1. Urgency of study Real estate market (REM) is an important market whose capital accounts for a large amount of the national economy. The volatility of the REM has a direct impact on the economy and society. Therefore, the measurement, the evaluation and the trend forecast of the REM’s volatility is a very important task in order to implement the policy of macroeconomic stabilization, to undergo timely reaction preventing and overcoming the instability, the collapse of the REM, to help the market players make suitable decisions consistent with the market trend. Due to this situation, the author has chosen the topic: "Building indicators kit for real estate market (applied in the capital of Hanoi)" for his dissertation. 2. Overview of studies related to the dissertation REM index has been studied by several authors in the world such as Sherwin Rosen, Quigley Jaymon Mason, Bailey, Rebert J.Shiller, David Zetland and some Asian authors. However, these studies have not figured out the establishment and calculation methods of the REM in certain emerging REMs. There are also a number of studies on Vietnam’s REM index. These are initial studies of their nature. But they still have some shortcomings in calculation methods, data collection. 3. Purposes of study This study allows the autor to focus on the one hand on clarifying some approaches to the methodology of the establishment of the REM index. On the other hand, it analyzes and evaluates the current status of establishment of Vietnam’s REM index. Also, it will illustrate the experiences of certain countries in determining the REM index and recommend some methods of application in Vietnam. On the basis of the findings, this study will help propose the orientations, the solutions to the improvement of establishment of Vietnam’s REM index until 2020 and the years to come. 4. Objects and scopes of study Objects of study: the index and methods of determining the REM index which is suitable for Vietnam. This study encompasses only the establishment of certain subindex of the the REM index on a small scale (REMI index) such as real estate price index and residential transaction volume, one of the most important index of the REM. Analyzing and evaluating the current status, this study focuses on the period from 2000 to 2014; Caculating and verifying the method of determining the REM index, it concentrates on REM of Hanoi City from 2011 to 2014 . 2 5. Approaches and methodologies REM index was studies in a systematic, synchronized manner and in a context of in Vietnam’s emerging REM whereas the information system is still incomplete. This study uses a combination of research methods. Qualitative research has been conducted by interviewing the specialists of the establishment of the REM index. Quantitative research has been used in order to calculate the REM index of Hanoi City. 6. Distributions of the study Academic approaches: (1) Systemize the basic theoretical approaches to the measurable indicators and methods of determining index measuring the evolutions of the REM; (2) Complete the necessary procedures to establish the REM index. Empirical approach: (1) Study the experiences of certain countries which have successfully established the REM index; (2) Analyze and evaluate the current status of REM index in Vietnam in recent years; (3) Calculate and determine the REM index of Hanoi City based on the generated methods; (4) Propose groups of solutions to complete the establishment of Vietnam’s REM index in Vietnam until 2020 and the years to come; (5) Propose groups of necessary conditions to ensure the completion of the proposed solutions to the establishment of Vietnam’s REM index. 7. Structure of the study This study has been divided into 3 chapters. Chapter 1: Chapter 1: Some theoretical and practical approaches to the establishment of the REM index. Chapter 2: Current status of the establishment of Vietnam’s REM index and the calculation of the REM index of Hanoi City. Chapter 3: Orientations and solutions to the completion of Vietnam’s REM index until 2020. 3 CHAPTER 1 SOME THEORETICAL AND PRACTICAL APPROACHES TO THE ESTABLISHMENT OF THE REM INDEX 1.1 Overview of real estate and real estate market (REM) 1.1.1 Overview of the real estate 1.1.1.1 Concepts of real estate: Different concepts of real estate can be generalized as follows: “Real estate is not only the immovable properties, ground resources but is all that is created by human labour attached to land under the three-dimensional space which constitutes a physical and functional form with determined structure.” 1.1.1.2 Features of the property: Each real estate has a certain number of attributes; amongs which the fixity is the most important attribute deciding the value of the real estate once being considered as a product on the market. 1.1.2 Overview of the real estate market 1.1.2.1 The concepts of real estate market: real estate market is a combination of real estate transactions based on commodity relations, currencies whereas the mechanism is influenced by the expectations of the market participants adjacent to the governmental and political intervention in the market. 1.1.2.2 The segments of real estate market: real estate market has different segments depending on the purpose of classification and the nature of real estate commodities. 1.1.2.3 The characteristics of real estate market: besides the common characteristics like other markets, real estate market has its particular characteristics. 1.1.2.4 The role of the real estate market: real estate market an important role in the socioeconomic development. 1.2 Theoretical approaches to the establishment of the REM index 1.2.1 Definition of the REM index The REM index encompasses different indicators which are established based on the principles of statistical sience. It provides the measuring tools and the indicators for the status of the REM for certain market areas throughout different periods. 1.2.2 The roles and significance of the REM index The REM index is essential for the citizens, real estate investors, financial institutions, policy makers and other real estate market participants. The REM index can also be used to predict the evolution trends of the REM in the future. 1.2.3 Classifications of the REM index 1.2.3.1 Pursuant to the purpose of use of the index: The index includes the indicators reflecting the supply and demand of real estate; the market size; the price and trade trends; the balance and imbalance of the market and finally the transparency of the REM. 4 1.2.3.2 Puruant to the aggregate-level of the index: the REM index includes the individual one and the one in the aggregate. (on a small and large scale). 1.2.4 Method of determining the REM index, advantages and disadvantages of the different methods 1.2.4.1 Method of determining the REM index The methods of determining the REM index have individual characteristics such as method of simple average; method of weighted average. Using econometric model to determine the REM index includes a number of different methods, but in general concentrates on the Hedonic Pricing Method (Hedonic); Repeat sales regression and Mix-adjusted method. 1.2.4.2 The advantages and disadvantages of the different methods of determining the REM index: The calculation of the REM index is difficult due to the particular characteristics of real estate products. These characteristics result in different advantages and disadvantages of each method. Therefore, the user has to analyze and evaluate in order to find out the appropriate method. 1.2.5 Influencing factors of the determination of the REM index Source: Data collected and processed by NCS. Diagram 1.1. Influencing factors of the determination of the REM index The calculation process of the REM index is influenced by many factors, including indirect factors and direct factors. Indire ct factor s The transparency of the REM The role of the state administration vis-à-vis the information system of the REM Mindset, perception of the role of the index REM index Direct factor s Receiving possibility of the input information Market allocation Resources to establish the index Method of determiing the index 5 1.2.6 Establishment procedure of the REM index The establishment procedure of the REM index can be generalized as follows: allocate the market and select the representative real estate product; collect data in the initial period, collect data in the reference period, calculate the REM index. 1.3 The experiences of certain countries in determining the REM index and lessons for Vietnam The experiences of certain countries in establishing and publishing the REM index could be considered as lessons in establishing Vietnam’s REM index. That is to say that the transparentising of the REM information plays an important role for the information source, data in order to calculate the REM index; the indicators which reflect the volatility of the real estate prices and real estate transaction volumes are very important; the used index must be consistent with the characteristics of the real estate market and the collection possibility of the respective data; the selection of the range of the REM index depends on the level of evolution of the REM; The frequency of the REM index depends on the level of development of the market and the capacity of calculating the index; the selection of method of determining of the index must be consistent with the data collection possibility; the establishment of the REM index has to follow certain procedure and the organization of the establishment of the index could be undertaken by different entities. 6 CHAPTER 2 CURRENT STATUS OF THE ESTABLISHMENT OF VIETNAM’S REM INDEX AND THE CALCULATION OF THE REM INDEX OF HANOI CITY 2.1 Summary of the development process of Vietnam’s REM 2.1.1 Development phase of the unofficial REM After 1954, the REM has not formed in Vietnam yet. Since 1986 only few types of markets have been formed, but not the REM due to the lack of legal framework for its operations. The 1980 constitution has neither provided an enough legal framework for the operations of the REM in a legal manner. 2.1.2The formation and development phase of the official REM The 1992 Constitution has created a legal framework for the constitutional and official formation of the REM. Along with the amendments of the 1992 Constitution, the land law enacted in 1993 has enabled the legal framework for the development of the REM. The year of 1992 is considered as the first milestone of the official formation of Vietnam’s REM. Since then, the REM has developped with various vicissitudes. 2.2 Analyze the current status of the establishment of Vietnam’s REM index in recent years 2.2.1 The determined REM index 2.2.1.1 The REM index determined by the market participants: In recent years, the real estate consultancy organizations, real estate brokers, real estate financing organizations, real estate trading companies have conducted the data collection, calculation in order to determine some index related to the REM. 2.2.1.2 The REM index determined by the state authorities: Pursuant to the Circular No. 20/2010 / TT-BXD dated October 27th, 2010 of the Ministry of Construction, Hanoi City has been establishing and publishing the apartment price index. 7 Source: Data retrieved from the Department of Construction of Hanoi City and processed by NCS. Diagram 2.1. Apartment price index of Hanoi City Danang, Ho Chi Minh and Can Tho cities haven’t established the REM index yet. The General Statistics Office Of Vietnam publishes the housing prices and building material prices. The National Financial Supervisory Commission has also analyzed, evaluated the development status of the REM, the capital market, money market and the housing price evolution over the years. 2.2.2.2 The real estate price index determined by the method of average prices: transaction volume index and price index of each specific real estate product will be determined based on the average arithmetic values of the transactions volumes and price index of each specific real estate product, specific project, one or several areas of the local market. 2.2.2.3 The real estate price index determined by the method of combination-adjusted: The real estate price index will be determined by the method specified by the Ministry of Construction, namely the arithmetic average method. This is a combination of the average (arithmetic and weighted) values and the real estate valuation and adjustment techniques. By its nature, this method of determining the real estate price index specified Mid-range apartment Mid-range apartment Mid-range apartment High-end apartment Mid-range apartment Mid-range apartment 8 by the Ministry of Construction can be considered as one kind of the method of combination-adjusted which is already applied worldwide. 2.2.3 The establishment procedure of the REM index: The establishment of the REM index determined by the market participants can be conducted in particular manner. The establishment of the REM index determined by the state authorities will be conducted in common manner. 2.2.4 Types of REM index publishing The REM index can be published via the trade publications, the flyers, the websites, the public media and the conferences. 2.3 Overview of current status os the establishment of Vietnam’s REM index 2.3.1 The achievements The REM index established in the recent years are the remarkable results, the premises to find out more solution to the completion of the procedure and methods of determining Vietnam’s REM index in the years to come. 2.3.2 Limitations and weaknesses - The quantities of information reflecting the status and development trend of the REM are very limited. - The qualities of information reflecting the status and development trend of the REM are still inadequate. Table 2.1. The reliability of information reflecting the evolution of the real estate prices Unit: % Information provider Number of responses Very reliable Reliable Unreliable Authorities 125 24 65 11 Real estate exchange 125 13 33 54 Real estate investors 125 17 38 45 Public media 125 14 24 62 Source: Data collected from survey by NCS The above-mentioned information shows the fact that the information provided by the real estate trading companies, real estate exchange and the public media has a low reliability while the one provided by the state authorities has higher reliability but is very limited. 2.3.3 Roots of the limitations and weaknesses 2.3.3.1 Objective root a) Low level of market transparency of the REM: - Information related to the development of REM: The access to the information 9 related to the development of the REM and respective real estate projects is very limited. 2.3.3 The cause of these problems and limitations 2.3.3.1 Objective reasons a) The transparency of market information is not high real estate: 13% 21% 53% 13% 9% 34% 41% 16% 8% 43% 31% 18% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Giai đoạn 2006- 2008 Giai đoạn 2009- 2011 Giai đoạn 2012- 2013 Sau khi quy hoạch điều chỉnh Trong giai đoạn thực hiện quy hoạch Sau khi công bố quy hoạch Không quan tâm Source: Data retrieved by NCS from various reports of the Ministry of Construction. Graphic 2.2. Portion of citizenship who knows the planning information This current status shows that the publicity and transparency of information related to the implementation of the master plan is inadequate. - Information related to the real estate status: Table 2.2. Ratio of the issuance of land use rights certificates in some cities Unit: % Cities 2008 2010 2012 2013 Hanoi 34 62 68 79 Ho Chi Minh 38 65 74 83 Source: Data retrieved from the state authorities’ reports by NCS. In reality, the transparency of the current real estate status is still at a low level. The process of issuance of land use rights and house ownership certificates is delayed and has caused the lack of legal basis of a considerable portion of the real estate. As a result, they cannot be circulated officially on the market. - Information related to real estate transactions: in reality, the real estate transactions in the unofficial market still account a big number; the access to the information related to the real estate demand, transaction prices is still limited. 10 Source: Data retrieved by NCS from the reports of the Ministry of Construction as of 2013 Diagram 2.3. Types of real estate transactions b) Mindset vis-à-vis the role and the significance of the REM index doesn’t meet the requirements: The state authorities are not fully aware of the role and the significance of the REM index. Therefore, the issuance of policy and the development of the implementation plan is still delayed; it’s difficult for the local authorities to coordinate. c) The roles of the state administration vis-à-vis the REM information remains limited: The state assumes the regulatory, market orientation roles by providing a legal framework so that the market players can access the information in an easy and official manner. But in reality, this fact is still inadequate and hasn’t created a fairness, equity in the market. d) Lack of experiences in establishing the REM index: the experiences of the advanced countries in establishing the REM index haven’t been gained systematically in order to be applied in Vietnam. 2.3.3.2 Subjective roots a) The access possiblity to the information and statistical data related to the real estate provided by the state authorities is restricted: the way of setting up the information system of the REM doesn’t meet a standard. Therefore, it hampers the access possibility of the REM information which is require to establish the REM index. Table 2.3. Status of the access to REM information Unit: % Crateria Number of responses Easy access Access Difficult access Information related to real estate development plan 125 16 38 46 Information related to the status of the REM 125 12 52 36 Information related to the real estate transactions 125 17 35 48 Source: Date collected from NCS’ survey 11 b) The range of the determined index is not consistent with the actual development of the market: the way of determining the market area in the course of the calculation of the REM index doesn’t reflect the difference of the market trends. c) Methods of determining the REM index is still inadequate: simple calculation methods are mostly used. Method of determining the REM index specified by the Ministry of Construction was initially approached the ones applied worldwide. The calculation techniques of this method is more complicated, but still inadequate. d) Resources for the establishment of the REM index are very limited: the data collection, the calculation of the REM index face difficulties in terms of cost planning, cost allocation to hire consulting agencies to carry out this task. e) The sanctions relating to the responsibilities for the information providing and the establishment of the REM index are incomplete: The responsibilities for the information providing and the establishment of the REM index at the management level specified in the legal documents are not efficient enough. 2.4 Calculate the REM index of Hanoi city 2.4.1 Summary of the development process of Hanoi’s REM 2.4.1.1 Ov