Real estate prices and supply will increase

The Land Law (amended) was just passed by the National Assembly on January 18, 2024 and will take effect from January 1, 2025. Mr. Dinh Minh Tuan, Director of Batdongsan.com.vn in the Southern region, commented that this will have positive impacts on the Vietnamese real estate market.

First, land prices will increase sustainably because the revised Land Law promotes land pricing close to market prices and improves land use efficiency. Specifically, according to the law, the land price framework will be abolished and land prices will be determined according to the market mechanism. This will ensure compensation rights for subjects whose land is subject to recovery.

In addition, the draft law stipulates multi-purpose land use, conversion of agricultural land to contribute to land accumulation for production; the right to lease, joint venture and association for public service units; receiving transfer of agricultural land for subjects who are not directly involved in agricultural production; expanding cases of land use purpose conversion...

All these regulations will improve land use efficiency, contributing to increasing land prices from agricultural land, non-commercial land... thereby increasing real estate prices in general.

The revised Land Law is expected to have a positive impact on the real estate market.

Second, the real estate supply will improve. One of the reasons why many projects have been delayed for a long time is the difficulty in land clearance due to inadequate compensation. The market-based pricing mechanism will support faster land fund deployment.

If in the past, access to land was not clearly regulated, now there are specific regulations in the Land Law (amended), determining which type of land is used for commercial purposes, which type of land serves which needs must be through bidding and auction. When investors have clearer methods and regulations to access land funds, the supply to the market will no longer be as scarce as it is now.

The law also has provisions to increase access to land for more people, more fully protecting their rights, including expanding the scope of land use rights for Vietnamese citizens, including those residing abroad; land policies for ethnic minorities; rights and interests of people whose land is recovered, implementing land use planning; administrative procedures, granting certificates to people and businesses - for example, receiving transfers of real estate projects, automatic extension for agricultural land.

However, Mr. Dinh Minh Tuan advised against expecting too much that the revised Land Law will help the market recover quickly because there is usually a delay of about 8-12 months for the law to be absorbed and implemented. That is also the reason why the National Assembly passed it early, so that from now until 2025, market participants can discuss, understand and prepare adaptation and application plans.

Chau Anh

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