Hanoi has a new land price list, house prices and real estate prices will increase sharply?

(CLO) Some opinions suggest that Hanoi's application of the new land price list may cause housing prices to continue rising in the near future.

Yesterday (December 20th), the Hanoi People's Committee announced a new land price list that will take effect immediately until December 31st, 2025.

According to the new land price list, Hanoi's land prices are 3.7 times higher than the previous land price list issued in 2019. The highest land prices are found on some streets in Hoan Kiem district, reaching up to 695.3 million VND/m2.

Some believe that Hanoi's implementation of the new land price list could lead to further increases in housing prices in the near future.

In a report submitted to the Government Office in September 2024, the Ministry of Construction stated that the application of the new land price regulations would have a ripple effect, triggering a 15-20% increase in real estate and housing prices compared to before.

Some believe that Hanoi's implementation of the new land price list could lead to further increases in housing prices in the near future. (Photo: MIA)

According to the Ministry of Construction , the main cost components affecting housing and real estate prices include seven cost items, among which are: land use fees, compensation costs for land clearance; project construction costs (housing, real estate); related taxes and fees, etc.

Therefore, the new land price list, which closely reflects market prices, will increase land-related costs such as land clearance, compensation for land acquisition, and land-related taxes and fees... while land use fees typically account for a large proportion of the total cost of a housing project, ranging from 7-20% for high-rise apartment projects and 25-50% for villa and townhouse projects.

Prices vary between projects due to factors such as location and the availability of infrastructure. Compensation costs for assets on the land typically account for a negligible proportion, around 2%, of the total construction investment cost.

Meanwhile, according to the Hanoi Department of Natural Resources and Environment, the land price list also serves as the basis for calculating the starting price for auctioning land use rights when the state allocates or leases land. Therefore, adjusting the price list is essential to ensure revenue from land auctions.

In response to concerns that the adjusted land price list, which sets prices many times higher than before, will lead to increased land taxes and fees, the Hanoi Department of Natural Resources and Environment explained that the new price list helps reduce the disparity and gradually bring land prices in the capital closer to market prices.

This helps establish a synchronized policy in land management and harmonizes the interests of the State, land users, and those who need land for project implementation. As a result, budget revenue increases through the fulfillment of land-related financial obligations by individuals and businesses.

In cases where land taxes and fees are too high and disproportionate to people's incomes, the Hanoi Department of Natural Resources and Environment suggests that the tax and fee rates should be reduced, rather than lowering land prices.

"The adjusted land price list does not affect compensation and support for land clearance when the State reclaims land. On the contrary, it contributes positively to land clearance, attracting investment and developing the Capital. The rights of those whose land is reclaimed are also better ensured, encouraging people to comply with land clearance policies," the Hanoi Department of Natural Resources and Environment stated.

Speaking with a reporter from the Newspaper of Journalists and Public Opinion, Mr. Nguyen Thanh Tuan, a real estate expert, said that the 3.7-fold increase in Hanoi's land prices could impact housing prices in Hanoi.

For residential properties, especially those in prime locations near Hoan Kiem Lake, the impact will not be too significant.

"Because, in typical real estate transactions, no one calculates based on the land price list; instead, they calculate according to market price. For example, houses on main streets like Hang Ngang, Hang Dao, or Dinh Tien Hoang near Hoan Kiem Lake are priced at 900 million to 1.1 billion VND/m2 according to the market price list, while the new land price list is nearly 700 million VND/m2," Mr. Tuan said.

For these projects, there are two possible scenarios. Firstly, if the project land has already been compensated and cleared, Hanoi's announcement of the new land price list will not have a significant impact. However, Mr. Tuan is concerned that some developers might use this as a reason to recalculate apartment prices after the sales launch.

The second case involves land currently undergoing compensation procedures, and Hanoi's announcement of new land price lists could lead to an increase in apartment prices in the near future. However, most of these cases are in suburban areas, quite far from the city center.

Source: https://www.congluan.vn/ha-noi-co-bang-gia-dat-moi-gia-nha-gia-bat-dong-san-se-tang-manh-post326806.html