Circular No. 20/2010/TT-BXD dated October 27, 2010 of the Ministry of Construction guiding the pilot elaboration and announcement of a number of real estate market indexes

CIRCULAR

GUIDING THE PILOT ELABORATION AND ANNOUNCEMENT OF A NUMBER OF REAL ESTATE MARKET INDEXES

THE MINISTRY OF CONSTRUCTION

Pursuant to the Government s Decree No. 17/ 2008/ND-CP of February 4, 2008, defining the functions, tasks, powers and organizational structure of the Ministry of Construction;

Pursuant to the Government s Decree. No. 153/2007/ND-CP of October 15, 2007, detailing and guiding the Law on Real Estate Business;

The Ministry of Construction, guides the pilot announcement of a number of real estate market indexes as follows:

Chapter I

GENERAL PROVISIONS

Article 1. Objectives, scope of regulation and subjects of application

1. This Circular guides the pilot determination and announcement of a number of real estate market indexes (below referred to as indexes) of Hanoi. Ho Chi Minh. Da Nang and Can Tho cities.

2. Concerned agencies, organizations and individuals shall refer to and use indexes announced under this Circular in managing local real estate markets.

3. Other provinces and cities are encouraged to apply this Circular in determining and announcing real estate market indexes to serve the management of local real estate markets.

Article 2. Types of real estate and assessment indexes

1. Types of real estate which are selected for the elaboration of assessment indexes:

a/ Real estate for sale or transfer:

- Condominium apartments;

- Detached houses:

- Housing grounds;

b/ Real estate for lease:

- Office buildings.

2. To-be-announced indexes include:

a/ Real estate price indexes, including:

- The common real estate price index of a locality;

- The price index for each type of real estate in each local area.

b/ Real estate transaction number indexes. including:

- The real estate transaction number index for a locality and the real estate transaction number index for each local area:

- The transaction number index for each type of real estate in a locality and the transaction number index for each type of real estate in each local area.

Article 3. Interpretation of terms

In this Circular. the terms below are construed as follows:

1. Condominium apartments mean apartments in condominiums graded according to current regulations (including grade-1. grade-2, grade-3 and grade-4 condominiums).

2. Detached houses mean houses (other than condominium apartments) built in existing street quarters, residential areas or new urban centers or under housing projects.

3. Housing grounds mean land plots for residential purposes which are formed in new urban centers or under housing projects or already exist in street quarters or residential areas.

4. Offices means the floor area of works which are used as working offices.

5. Real estate price index is an index reflecting the fluctuation in the price of real estate which is calculated based on successful time-based real estate transactions.

6. Real estate transaction number index is an index reflecting the fluctuation in the number (the area and quantity of transacted real estate) of successful time-based real estate transactions.

7. Real estate transaction price means the price of real estate successfully transacted in the market during the period of calculation which is not the price of first-time transaction of newly formed or created real estate.

8. Number of real estate transactions means the number of successful real estate transactions during the period of calculation.

9. Inceptive lime means a point of time selected for use as an inception for comparison.

10. Comparative time means a point of time at which indexes must be determined for comparison with those at the inceptive time or another comparative time.

11. Representing real estate means a real estate of a common nature which is selected to represent an area in the course of calculating real estate price indexes.

Article 4. Principles and requirements on announcement of indexes

1. Indexes must be announced in a sufficient and timely manner to keep pace with fluctuations in local real estate markets.

2. Announced indexes include indexes for each local area and the common indexes for a locality.

3. Indexes shall be calculated in a percentage (%).

4. Indexes shall be announced publicly in the mass media.

Chapter II

DETERMINATION OF REAL ESTATE MARKET INDEXES

Article 5. Inceptive time and comparative times

1. The selected inceptive time is the first quarter of 2011.

2. Comparative times:

- Each quarter and each year against the inceptive lime.

- Each quarter against preceding quarter.

- Each quarter and each year against the same period of the previous year.

Article 6. Collection of data for determination of indexes

1. Data related to real estate transactions shall be collected from the following sources:

- Concerned local state management agencies under notarized contracts on real estate transactions, registration of real estate ownership rights or use rights and obligations to pay taxes on real estate transactions. Data shall be summarized according to the form provided in Appendix 2 to this Circular {not printed herein).

- From real estate trading floors or market surveys and researches. Forms used for data survey and research are provided in Appendix 3 to this Circular (not printed herein).

2. The collection and archive of data relating to real estate transactions shall be conducted on a monthly basis.

Article 7. Determination of indexes

1. Real estate market indexes shall be determined under the guidance in Appendix 1 to this Circular (not printed herein).

2. When necessary, agencies assigned to elaborate indexes may hire organizations and individuals that are qualified for and experienced in valuating real estate to conduct all or part of jobs involved in data collection and index calculation and determination. Hired organizations and individuals shall take responsibility before agencies assigned to elaborate indexes and before law for the truthfulness and objectivity of collected and calculated data.

Before announcing indexes, agencies assigned to elaborate indexes shall consider and evaluate the conformity of data determined by hired organizations and individuals.

3. Funds for data collection and index calculation, determination and announcement shall be allocated from annual local budgets.

Chapter III

ANNOUNCEMENT OF REAL ESTATE MARKET INDEXES

Article 8. Contents of announcement

1. To-be-announced indexes include real estate price indexes and real estate transaction number indexes.

2. Indexes shall be announced for each type of real estate or each area as well as for the whole locality.

Article 9. Time of announcement

1. Indexes shall be announced on a quarterly and annual basis.

2. Time of announcement:

- For indexes to be announced on a quarterly basis: The announcement shall be conducted in the first month of the subsequent quarter.

- For indexes to be announced oil an annual basis: The announcement shall be conducted in the first quarter of the subsequent year.

Article 10. Organization of announcement

Quarterly and annually, agencies assigned to elaborate indexes in localities selected to carry out the pilot announcement of real estate indexes shall announce indexes in the mass media.

Chapter IV

ORGANIZATION OF IMPLEMENTATION

Article 11. The Ministry of Construction shall:

1. Guide concerned localities in elaborating and announcing indexes under this Circular.

2. Urge and periodically inspect the implementation of this Circular.

Article 12. People s Committees of cities

engaged in the pilot announcement of real estate indexes shall:

1. Direct the implementation of this Circular.

2. Assign provincial-level Construction Departments to assume the prime responsibility for. and coordinate with concerned units in developing databases on real estate transaction prices and number and determining and announcing indexes under this Circular. Indexes shall be announced for the first time from the third quarter of 2011.

3. Assign provincial-level Justice: Finance; and Natural Resources and .Environment Departments to direct their attached units in providing information, summarizing and archiving data relating to real estate transactions and quarterly sending summarized results to provincial-level Construction Departments for calculation.

4. Allocate funds for the elaboration and announcement of indexes.

5. Assign provincial-level Construction Departments to send periodical reports on the announcement of indexes to the Ministry of Construction for monitoring and inspection.

Article 13. Implementation provisions

1. This Circular takes effect 45 days from the date of its signing.

2. Any problems arising in the process of implementation should be reported to the Ministry of Construction for consideration and settlement.-