The era of creating artificial hype is over.

The amended Real Estate Business Law of 2023, effective from January 1, 2025, stipulates that the right to use land may not be transferred to individuals for self-construction of houses or self-subdivision and sale of land plots in wards, districts, and cities of special, type I, II, and III urban areas, and in cases where the right to use land is auctioned for investment in housing construction projects as prescribed by the Land Law. Accordingly, the new regulation will prohibit land subdivision and sale in a total of 105 cities and towns nationwide.

Many are concerned that this will impact land prices, and in fact, recently, in many localities, investors have been "hunting" for land plots in anticipation of the effective date of the 2023 Real Estate Business Law. However, in the long run, experts agree that tightening regulations on land subdivision and sale will help make the market more transparent and eliminate speculative price surges.

The practice of subdividing land and selling plots in major cities will be prohibited after the amended Real Estate Business Law 2023 comes into effect.

A financial and real estate expert believes that this regulation in the law aims to curb the "speculative bubble" in land prices, contributing to the stability of the real estate market. At the same time, it encourages the development of projects with synchronous and modern technical infrastructure. In particular, it aims to protect homebuyers and limit land disputes.

According to this expert, the regulation prohibiting land subdivision and sale only applies to residential land, not non- agricultural land. Therefore, people can still build houses on their own land without going through a land subdivision project. "The ban on land subdivision and sale in 105 cities and towns is a measure aimed at developing a healthy and sustainable real estate market and protecting consumers. However, close coordination between relevant agencies is needed to ensure effective implementation of this regulation," the expert commented.

According to Mr. Doan Quoc Duyet, Director of Tin Thanh Company, the ban on land subdivision projects in localities and the specifics of how this ban will be implemented will have to wait until the law officially comes into effect. "Currently, with very low interest rates and limited real estate supply, insufficient to meet buyer demand, the information about restricting land subdivision has contributed to 'heating up' the market because many people worry that prices will rise again and rush to buy up land, but it's not yet a land boom," Mr. Duyet commented.

Mr. Tran Khanh Quang, General Director of Viet An Hoa Real Estate Company, also believes that the regulations on land subdivision and sale in the 2023 Real Estate Business Law only make subdivided land plots more attractive and subject to more transactions, but are unlikely to cause a real estate boom as recent rumors suggest. "In the future, land subdivision and sale will be more restricted in urban areas to control the real estate market, limit speculative bubbles, reduce 'ghost' projects, and especially to protect the rights of buyers from being deceived into buying land plots in illegal subdivision projects or buying land that is then left abandoned, causing a waste of resources," Mr. Quang said.

According to Mr. Quang, this regulation requires real estate businesses and individuals to develop projects, obtain approval according to local planning, and sell houses along with land use rights, instead of subdividing and selling plots as is currently the case. Individual households, however, are still allowed to subdivide and transfer existing residential land if they meet the necessary conditions. "Simply put, currently there are three cases of land subdivision: selling land without selling houses, individuals developing approved 1/500 scale plans for land subdivision, and individuals subdividing existing land. Under the new regulation, companies developing projects and individuals developing 1/500 scale plans will be prohibited from subdividing and selling plots," Mr. Quang said, adding that this law will help reduce speculation and only those with genuine housing needs will dare to buy because housing projects will result in higher house and land prices compared to undeveloped land, while also preventing land from being left idle.

Will rural land prices increase?

According to some experts, the downside and impact of tightening regulations on land subdivision and sale in special urban areas I, II, and III is that it will reduce supply, leading to increased investment in land from area IV (urban land type 4) onwards and rural land, indirectly stimulating price increases in these areas.

Source: https://nld.com.vn/het-thoi-gay-sot-ao-196240514210807579.htm