New land law will increase real estate prices: experts

By Ngoc Diem   May 27, 2024 | 05:44 am PT
New land law will increase real estate prices: experts
Aerial view of a southern HCMC area. Photo by VnExpress/Quynh Tran
The 2024 Land Law, which does away government mandated prices for land and allows the market to determine them, is likely to increase housing prices, several experts said.

The law, presented by the government to the National Assembly, is expected to take effect on July 1, six months earlier than planned. The law entails new policies, including the removal of the government land price framework and its yearly update.

Giang Do, Director of Counseling Services at property firm Savills Vietnam, stated that using market prices to determine land value would raise land clearance compensation costs. She also noted that this would lead to higher land tax payments.

This change would increase total project investments, compelling developers to raise their selling prices, she added.

Echoing Giang's opinion, Dinh Minh Tuan, director of real estate platform Batdongsan in the south, said land prices would increase as "the components that contribute to the product would be more costly" once the new law goes into effect.

Nguyen Van Dinh, chairman of the Vietnam Association of Realtors, said real estate prices might increase once the land price framework is removed, but there in unlikely to be a "land fever."

The real estate market saw several price surges in 2020-22, increasing in some areas by 40-50% compared to the pre-Covid period.

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