Much pressure is relieved
Immediately after the revised Land Law was passed by the National Assembly on January 18, at an event organized by the Ministry of Construction, Mr. Le Viet Hai - Vice President of the Vietnam Association of Construction Contractors, Chairman of Hoa Binh Construction Group - said he felt a lot of pressure was relieved when the Land Law, Housing Law, Real Estate Business Law, Law on Credit Institutions... were revised and passed.
"I am very grateful for the efforts of the Government and the National Assembly in resolving the issues that businesses have been complaining about for many years and showing concern for the survival of businesses. We really appreciate it," Mr. Hai expressed.
The Vietnam Association of Realtors (VARS) also believes that when the Land Law is passed, the recovery process of the real estate market will have the opportunity to be shortened. The market will soon enter a new normal phase.
Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), welcomed the National Assembly's vote to pass the Land Law to "institutionalize" Resolution No. 18 dated June 16, 2022 of the Party Central Committee.
Land resources are managed, exploited and used to ensure the highest savings, sustainability and efficiency; meeting the requirements of promoting industrialization, modernization, fairness and social stability; creating momentum for our country to become a developed country with high income by 2045. The real estate market, including the land use rights market, becomes a channel for reasonable, fair and effective land allocation.
Mr. Chau pointed out that the revised Land Law has many outstanding highlights such as allowing the expansion of the limit for receiving the transfer of agricultural land use rights of individuals to no more than 15 times the limit for agricultural land allocation of individuals for each type of land. From there, agricultural land is created conditions for more effective use to help the agricultural sector develop more and more, positively affecting both the economy and the real estate market in the process of urbanization and development of rural residential areas.
The Association welcomes the revised Land Law which has removed the land price framework and stipulated the land price table. Accordingly, the land price table is built annually and the first land price table is announced, applied from January 1, 2026, adjusted from January 1 of the following year, which will help the land price table approach the market land price.
The revised Land Law specifically regulates land allocation and land lease through auction of land use rights for clean land created by the State, or land allocation and land lease through bidding to select investors to implement investment projects using land for land that has not been cleared.
This ensures that the interests of land users whose land is recovered are compensated at the correct market price, and are resettled with priority given to on-site resettlement. Investors also know clearly the costs and time to complete compensation and site clearance, and are allocated land to implement the project, and there is no longer a situation of speculators hiding behind the landowners, causing difficulties for investors.
Ring Road 3 seen from above (Photo: DT).
Mr. Chau said that the revised Land Law will create very favorable conditions for land use to promote investment activities in production and business development (excluding commercial housing projects) such as developing projects in industrial parks, economic zones, high-tech zones, high-tech agricultural zones, industrial clusters, production and business establishments, trade, services, tourism, healthcare, education, scientific research, parks, entertainment areas, etc.
Mr. Dinh Minh Tuan, Director of Batdongsan.com.vn in the Southern region, commented that the revised Land Law, which was recently passed by the National Assembly on January 18, 2024 and will take effect from January 1, 2025, will have positive impacts on the 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 this law, the land price framework will be removed. That will raise land prices to a level close to the market, ensuring compensation rights for subjects whose land is subject to recovery.
In addition, the Law stipulates multi-purpose land use, conversion of agricultural land to contribute to land accumulation for production; 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 of these regulations will improve land use efficiency, contribute to increasing land prices from agricultural land, non-commercial land... thereby increasing real estate prices in general.
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 previously access to land was not clearly regulated, now there are specific regulations in the revised Land Law, determining which types of land are used for commercial purposes, which types of land serve 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 protect people's 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...
According to Mr. Tuan, this year, investors will increase supply to the market, because if their liquidity slows down now, they will not be able to recover much capital next year. If they wait until 2025, when the revised Land Law officially takes effect, investors will only be able to collect 5%, then it will take a long time to complete financial obligations and meet the conditions before they can sell.
Mr. Tuan stated that many subjects will benefit from the Land Law (amended). Enterprises will have better mechanisms, clearer and more specific regulations to access land funds and develop projects.
People in the clearance area also enjoy better compensation. Land access is expanded with more flexible opportunities and more reasonable price mechanisms. Cases of land recovery are clearly regulated in the Land Law, and auction regulations are also transparent and public.
Protect maximum benefits for the people
According to lawyer Nguyen Thanh Ha - SBLAW Law Firm - under the Hanoi Bar Association, the revised Land Law has many provisions adjusted towards protecting the maximum interests of the people. These are all correct and positive changes, contributing to the fair and stable development of the real estate market.
The passage of the revised Land Law can be seen as a positive signal as well as an expectation for the recovery of the real estate market.
In addition, a strictly regulated legal corridor, consistent with practice, will provide investors with a clear legal framework to smoothly implement new projects; helping to manage the market stably and transparently.
Lawyer Ha assessed that in recent years, some regulations have not been clear, such as the method of determining land types, which projects are allocated land; which projects must go through bidding, auction, the mechanism for determining auctioned land prices, etc., leading to the situation where projects have difficulty accessing land.
The revised Land Law overcomes limitations and provides detailed regulations on problems, which helps to open up access to land. From there, businesses will have more favorable access to land.
In addition, the law will also create a fair and stable competitive real estate market when land access is regulated in a public and transparent manner. Enterprises with experience, capacity, and a history of effective land use will have more opportunities and advantages.
Ho Chi Minh City from above (Photo: Hai Long).
The new mechanism minimizes the relationship between asking and giving, which will positively contribute to creating a fair competitive environment for real estate businesses.
From the perspective of an industry insider, Mr. Nguyen Huu Thanh - Deputy General Director & Strategic Consultant of Weland Company, assessed that there will be no major changes to businesses and the real estate market in the near future. The impact of the revised Land Law on the market will not be too positive.
Mr. Thanh said that many contents in the current Law are regulated more strictly, such as land valuation, site clearance... From the perspective of project investors, this is not a very positive thing.
However, Mr. Thanh assessed that the revised Land Law with such strict regulations would help avoid loss of resources when the State's land leased annually is not approved and converted into housing projects.
The Ho Chi Minh City Real Estate Association found that the regulation of land price tables also increases the work pressure for localities. The revised Land Law stipulates four methods of land valuation including comparison, income, surplus, and land price adjustment coefficient to determine specific land prices. However, in case of necessity, it is necessary to stipulate other land valuation methods that have not been stipulated.
The Association believes that it is necessary to research and develop a pilot project to submit to competent authorities for submission to the National Assembly for consideration and issuance of a resolution allowing the pilot implementation of commercial housing projects through agreements on receiving land use rights or having other land use rights as prescribed by the Land Law.
In particular, the Association recommends that the National Assembly allow the immediate application of some provisions of the revised Land Law such as provisions on land valuation, land use for sea encroachment projects, and remove practical obstacles, especially allowing the immediate application of provisions on land valuation.
However, Mr. Dinh Minh Tuan also commented that we should not expect too much that the passing of this revised Land Law will make the market recover quickly because there will be 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 for application.
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