How will the early application of 3 new laws affect the real estate market? Will land prices increase?

The Government has just submitted to the National Assembly for consideration the early application of three laws related to the real estate market, including the 2024 Land Law, the 2023 Real Estate Business Law and the 2023 Housing Law.

According to regulations, these three laws will officially take effect from January 1, 2025. However, the Government 's proposal allows the three new laws to take effect from July 1, 6 months earlier than the previous regulation.

The early application of three laws, namely the 2024 Land Law, the 2023 Real Estate Business Law and the 2023 Housing Law, will have a strong impact on the real estate market. (Photo: ST)

Commenting on this issue, some experts say that real estate prices, especially land prices, will increase, but will not create a virtual fever.

Mr. Dinh Minh Tuan, Director of Property Guru Vietnam, assessed that the early recovery of the land market was driven by two factors: the wave of anticipating changes in the three new Laws that will take effect from 2025 and the "saturation" of other investment channels.

According to Mr. Tuan, the Law on Real Estate Business (amended) and the Law on Housing (amended) will greatly affect the land market from 2024 onwards.

In particular, the tightening regulations on land subdivision are a hot spot, it is predicted that the supply of subdivided land will decrease sharply after 2025, but the demand for land is unlikely to decrease in the long term because Vietnamese people still favor this type of land. When supply is low and demand is high, land prices will increase. Many investors will start hunting for land before the new law is applied.

Besides, the real estate market currently does not have many products to invest in. The apartment segment is “stuck” with new projects due to unfinished legal procedures, private houses and townhouses are not diverse, and the resale prices are high.

Meanwhile, land is an easy-to-buy product, easy to transfer ownership, has a certificate and keeps the asset sustainable, safe, has good profitability and most importantly, the current land price is still very "soft" compared to 2-3 years ago.

Land is a type of investment that any member of the market can invest in due to the diversity of area, price, and region. In localities with rapid economic growth, the land in this place will still grow sustainably thanks to the trend of population dispersion and the large infrastructure systems that are gradually forming.

However, Mr. Dinh Minh Tuan also emphasized that not all land products can increase in price and be accepted by the market.

"Only land products with clear legal advantages, good locations, close to infrastructure or industrial zones, and commercial value will be sought after by buyers and may increase in price in the future. However, the price increase of land will hardly be as strong as the peak period and it is unlikely that there will be a "shocking" price increase like what happened a few years ago," Mr. Tuan commented.

Regarding the 2024 Land Law, Ms. Giang Do, Consulting Director at Savills Vietnam, analyzed that the new law stipulates that determining land prices according to market principles is a particularly important step forward.

Accordingly, the 2024 Land Law has made specific changes such as eliminating the land price framework, updating the land price table annually and expanding the right to decide on specific land prices to the district level, which is expected to improve the efficiency of land allocation and use and increase State budget revenue.

“Regulations on land valuation methods and specific applicable cases help determine land prices closer to market prices,” said Ms. Giang Do.

Ms. Giang said that Vietnam's 2024 Land Law brings significant changes in the principles of land price determination, focusing on land valuation according to market principles, which will help increase transparency and liquidity for the real estate market.

Under the previous Land Law, land valuation was regulated according to the principles of land use purpose and duration, and was “consistent with common land prices on the market” collected from auction winning prices and collected from land use.

“However, the new Land Law emphasizes the market principle. This means that the determined land price will reflect the true market value of the land,” Savills experts emphasized.

Ms. Giang commented that the market value clearly reflects the understanding of both buyers and sellers in the market. At that time, the land will be allocated to investors who are willing to pay the highest price. This approach helps promote land allocation and more efficient land use.

In the future, when the land price database is completed, the information on buying and selling will be made public. At this time, buyers and sellers can access to find out transaction information.

From there, there will be clear awareness, helping to increase transparency for the real estate market. In addition, the buying and selling of real estate will also take place more easily, helping to increase liquidity for the market.

Source: https://www.congluan.vn/ap-dung-som-3-luat-gia-dat-se-tang-post296934.html