Property developers race to snap up lands as price hikes loom

The amendments to the Land Law, effective from August 1, introduced an annual land price list that is more aligned with market forces than the previous fixed price framework.

It will be applied from January 1, 2026, and is expected to increase land prices significantly.

A draft of the list for HCMC shows for instance that the increase will be by a factor of five to 10 from current prices, and even 15-50 times in some areas.

Analysts expect this to make land clearance more expensive and drive up the costs of property projects.

Developers are therefore scrambling to acquire lands to preempt the price hikes. Dat Xanh Group seeks to buy 100-200 hectares across the country and Danh Khoi plans to spend VND375 billion (US$14.9 million) on plots in Binh Phuoc and Binh Thuan provinces.

Many others like DIC Holdings, Khang Dien, Ha Do, Ecopark, Vinhomes, and Phu My Hung have been actively buying 50- to 150-hectare plots in Lam Dong, Long An and Binh Thuan provinces and Hai Phong City for their upcoming projects.

Lucas Ignatius Loh Jen Yuh, CEO of developer Nam Long Investment Corporation, said his company had been investing heavily in lands for the last several years, and amassed around 685 hectares that it plans to develop in the next five years.

It is continuing to acquire agricultural lands through direct purchases and mergers and acquisitions, he said.

As land becomes more costly, businesses with large holdings would have an advantage, he pointed out.

Phan Le Thanh Long, founder of finance consulting company AFA Group, said developers would have more choices and get better prices now if they buy land rather than later.

"Acquiring land through purchases and M&A will be property developers’ priority from now through the next year."

Dinh Minh Tuan, southern regional director of real estate trading platform Batdongsan, said the new provisions in the law would increase the prices of various types of lands, including agricultural and non-commercial. Acquiring cheaper lands would allow developers to not hike prices too much, he said.

No new law has ever resulted in a decline in property prices, he said. In future only major companies would have the resources to launch large-scale projects in good locations and smaller firms would have to find lands elsewhere or shift to property segments that cost less to develop, he added.