The market continuously sets new price levels, with the mindset of 'every inch of land is gold', Hanoi residential land is in the sights of buyers

Rising real estate prices, establishing new benchmarks, high demand for residential land in Hanoi , and the latest regulations on mortgaging land titles… are among the latest real estate news.

Land-based real estate is becoming an alternative option as prices aren't being artificially inflated like in apartments. (Photo: Linh An)

Real estate prices are constantly rising.

According to Ms. Pham Thi Mien, Deputy Director of the Vietnam Real Estate Market Research and Evaluation Institute (Vietnam Real Estate Brokers Association), real estate prices are continuously setting new high levels, far exceeding the income growth rate of the vast majority of the population.

Specifically, the real estate price index for apartments in Hanoi and Ho Chi Minh City in Q2 2024 increased by 58% and 27% respectively compared to Q2 2019. Affordable commercial apartment projects have completely disappeared from these cities. Even mid-range apartments are becoming increasingly scarce, gradually being overtaken by the high-end and luxury segments, with over 80% of the apartments launched in Hanoi and Ho Chi Minh City in 2024 priced at 50 million VND/m2 or higher. Many newly launched apartment projects have prices reaching tens of thousands of USD per square meter.

The persistently high prices of primary market apartments have led to a surge in the prices of older apartments, with many decades-old units being traded at double or triple their original handover prices. Following this apartment price boom, the prices of detached houses, including villas and townhouses, have also increased significantly, including some projects in districts/counties far from the center of Hanoi, as the supply in the inner city becomes increasingly scarce.

While previously, prices of hundreds of millions of VND per square meter for villas were considered high, now some villas are being advertised at prices up to 1 billion VND per square meter and are still considered normal. Land prices are also continuously increasing. Many provinces and cities are experiencing localized "booms" in legally sound land plots due to renewed investment activity or artificial supply and demand created by certain investor groups to drive up prices. In some provinces and cities, such as Hai Duong , prices have surpassed the peak of the 2022 boom.

Ms. Mien believes that, in the short term, primary real estate prices will be difficult to decrease, especially in the apartment segment – ​​the type of housing that primarily meets the housing needs in urban areas. This is because, in the context of ever-increasing demand for real estate, especially investment demand, developers will prioritize the development of the high-end segment to maximize profits as land becomes increasingly scarce, construction costs rise, and infrastructure and amenities are increasingly improved.

The new legal framework eliminates developers with weak financial capacity, forcing the remaining developers in the "playing field" to develop large-scale urban areas with integrated infrastructure and amenities, and a wide-ranging impact. This means higher costs, making it difficult for real estate prices to fall.

At the same time, the fact that the market is left with only developers with strong financial resources, existing capabilities, or advantages in land acquisition will continue to maintain the monopoly on supply, and large developers will continue to determine market prices, often at higher levels to maximize profits.

Residential land in Hanoi is in high demand.

Land and houses are becoming an alternative option as prices are not as volatile as those of apartments. A survey by Batdongsan.com.vn shows that the prices of detached houses in inner-city districts such as Dong Da, Ba Dinh, Thanh Xuan, Cau Giay, Nam Tu Liem, Ha Dong, and Hoang Mai have recorded an average increase of 10-20% since the beginning of the year. Transaction volume at real estate agencies specializing in selling land and houses in Hanoi has increased by an average of 10-30% in the last three months, coinciding with the period when apartment prices have been fluctuating wildly.

Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn, also stated that Batdongsan.com.vn's real estate market data shows that detached houses and townhouses are maintaining a stable level of interest. In the first three months of 2024, detached houses and townhouses showed an upward trend in transaction volume and interest across all price ranges. In particular, interest increased sharply in almost all districts and communes of Hanoi.

Specifically, compared to the beginning of 2023, interest in private houses in Nam Tu Liem district increased by 43%, Hoang Mai by 28%, Dong Da by 21%, Ha Dong by 26%, and Thanh Xuan by 12%. Regarding prices, the average price of private houses in Hanoi increased from 95 million VND/m2 in Q1 2021 to 164 million VND/m2 in Q2 2024.

Thus, the average price increase rate of detached houses is quite stable, averaging 15-20% per year depending on the area. This stability, without price fluctuations or erratic increases, keeps the volume of transactions for detached houses and townhouses steady and consistent, making them attractive targets for real buyers and investors amidst the constantly fluctuating apartment prices in Hanoi.

Real estate expert Tran Huu Xiem, Chairman of MSP Land System, said that many factors ensure the future growth of residential real estate, causing capital to shift strongly towards this segment.

Specifically, the legal changes in the newly passed Land Law and Real Estate Business Law are promoting the development of the real estate market in a transparent and healthy direction. In particular, future land prices are expected to increase due to changes in the frequency of price updates, as the land price framework and annual land price lists are no longer updated.

In addition, the prices of land plots, townhouses, and detached houses with clear legal status will also increase as the detailed conditions for granting land use rights certificates for undisputed land become stricter, more transparent, and clearer; and the accuracy of price determination becomes more stringent.

Furthermore, the Chairman of MSP Land System believes that, linked to the traditional Vietnamese mindset of "every inch of land is worth its weight in gold," residential real estate always holds appeal due to the high demand for home ownership and asset accumulation among Vietnamese people. The scarcity of land in inner-city areas, coupled with continuously increasing demand, will also drive up prices and transactions. Therefore, this segment is always considered a safe haven for capital, attracting both real estate buyers and investors.

Bac Giang issues latest regulations on land subdivision.

The People's Committee of Bac Giang province has just issued Decision No. 24 detailing the limits on land allocation for residential land, limits on recognition of residential land; minimum area and conditions for land subdivision and consolidation; limits on agricultural land allocation; limits on allocation of unused land to individuals for use; limits on receiving transfers of agricultural land; criteria and conditions for changing the purpose of use of rice land, protective forest land, special-use forest land, and production forest land to other purposes; and other types of documents of land users before October 15, 1993, applicable in the province.

Accordingly, the regulations state that the conditions for subdividing land plots are as follows: for residential land, the minimum residential land area must be 32m2, the minimum frontage size must be 4m, and the minimum depth from the building line (if any) must be 5.5m for original plots with existing depths of 5.5m or more.

In cases where the land plot is reclaimed by the State and its existing depth is less than 5.5m, the minimum depth must be 3m.

Regarding the land allocation limit for individuals, according to the new regulations, for residential land in urban areas within the wards of Bac Giang City (excluding cases where communes within the administrative boundaries of districts and towns are converted into wards or townships due to new establishment, division, or merger of administrative boundaries), the maximum is 100m2.

Urban residential land in towns; residential land in towns converted into wards; residential land in wards of Viet Yen town; residential land in the communes of Dinh Tri, Song Khe, Tan Tien, Dong Son, Tan My, Song Mai in Bac Giang City; residential land in communes within the boundaries of Bac Giang City converted into wards; rural residential land adjacent to expressways, national highways, and provincial roads with a maximum area of ​​120m2.

Residential land in communes within the administrative boundaries of districts and towns that have been transformed into wards or townships due to the establishment, division, or merger of administrative boundaries (after the Resolution of the Standing Committee of the National Assembly on the establishment, division, and merger of administrative boundaries takes effect) is limited to a maximum of 200m2.

Residential land in midland communes of districts, cities, and towns is limited to a maximum of 300m2. Residential land in mountainous communes of districts and towns is limited to a maximum of 360m2.

In cases where the land plot was formed before December 18, 1980, the residential land area is determined by 5 times the residential land allocation limit corresponding to each region or area, but not exceeding the area of ​​the land plot currently in use, and a maximum of 800m2.

In cases where the land plot was formed between December 18, 1980, and before October 15, 1993, the recognized residential land limit is determined by three times the residential land allocation limit corresponding to each region and area, but the total area shall not exceed the area of ​​the land plot currently in use, with a maximum of 600m2.

This decision takes effect from September 21st and replaces Decision No. 40 of 2021 and Decision No. 44 of 2023 of the Provincial People's Committee.

The conditions under which land users can mortgage their land use rights are stipulated in Article 45 of the 2024 Land Law. (Photo: Ha Phong)

Important regulations regarding mortgaging land title certificates.

The conditions under which land users can mortgage their land use rights are stipulated in Article 45 of the 2024 Land Law.

Conditions for exercising the right to mortgage a land title certificate.

Based on Clause 1, Article 45 of the 2024 Land Law, land users may mortgage their land use rights when the following conditions are met:

Having a Certificate of Land Use Rights or a Certificate of Ownership of Housing and Land Use Rights or a Certificate of Land Use Rights, Ownership of Housing and Other Assets Attached to Land, except in the following cases: (1) Inheritance of land use rights; (2) Conversion of agricultural land when consolidating land plots, exchanging land plots, gifting land use rights to the State, residential communities; (3) Economic organizations with foreign investment capital receiving the transfer of real estate projects; (4) Households and individuals using land that have not been granted Certificates of land use rights, Certificates of ownership of houses and land use rights, Certificates of land use rights, ownership of houses and other assets attached to land, Certificates of land use rights, ownership of assets attached to land, but meet the conditions for granting Certificates of land use rights, ownership of assets attached to land, are allowed to transfer land use rights, lease, sublease land use rights, and contribute capital with land use rights to implement projects.

Land that is free from disputes or where disputes have been resolved by competent state authorities, court judgments, or arbitration awards that have become legally effective.

The land use rights are not subject to seizure or other measures to ensure the enforcement of judgments as prescribed by the law on civil judgment enforcement. Within the land use period, the land use rights are not subject to temporary emergency measures as prescribed by law.

Does a mortgage contract using a land title certificate need to be notarized?

According to Clause 3, Article 27 of the 2024 Land Law, the notarization and authentication of contracts and documents exercising the rights of land users shall be carried out as follows:

Contracts for the transfer, donation, mortgage, or capital contribution using land use rights, or land use rights and assets attached to the land, must be notarized or certified, except as stipulated in point b of this clause.

Lease agreements, sublease agreements for land use rights, land use rights and assets attached to land, agreements for the conversion of agricultural land use rights; agreements for the transfer or contribution of capital in the form of land use rights, land use rights and assets attached to land, and assets attached to land where one or both parties involved in the transaction are organizations engaged in real estate business activities, must be notarized or certified as required by the parties.

Documents relating to the inheritance of land use rights, land use rights, and assets attached to the land must be notarized or certified in accordance with the provisions of civil law. Notarization and certification are carried out according to the regulations of the law on notarization and certification. Therefore, when mortgaging a land title certificate, the mortgage contract must be notarized or certified.

What documents are required for a land title mortgage?

Specifically, according to Article 27 of Decree 99/2022/ND-CP, the person requesting mortgage registration must submit one set of documents, including the following: Original application form according to mẫu số 01a; Guarantee contract or notarized/certified guarantee contract (1 original or 1 certified copy);

Original certificate (land title certificate, house title certificate) except in cases where the registration of security measures is submitted simultaneously with: (1) Land and property registration documents; or; (2) Documents certifying ownership of property attached to the land.

Can land that is mortgaged be sold?

Based on Clause 8 of Article 320 and Clause 5 of Article 321 of the 2015 Civil Code, the mortgagor is not allowed to sell, exchange, or give away the mortgaged property, except with the consent of the mortgagee. Therefore, the mortgagor only has the right to sell the land if the mortgagee agrees.

Source: https://baoquocte.vn/bat-dong-san-moi-nhat-thi-truong-lien-tuc-thiet-lap-mat-bang-gia-moi-tu-duy-tac-dat-tac-vang-tho-cu-ha-noi-lot-diem-ngam-nguoi-mua-286217.html