Strong volatility warning
The simultaneous issuance of land price lists under the 2024 Land Law is expected to create major fluctuations in land prices in many localities, leading to significant impacts on the real estate market, investment costs and people's access to housing.
Dr. Pham Anh Tuan, Head of the Department of Land Management ( Hanoi University of Natural Resources and Environment), commented that the adjusted land price list will likely increase compared to the current price list. This may benefit people whose land is recovered and increase local budget revenue, but at the same time, it will increase investment costs, especially site clearance costs in development projects; affecting the real estate market and people in many ways.
The increase in land prices will greatly affect land revenues such as land use fees, taxes, and fees, but also increase investment costs, affecting real estate prices on the market. Mr. Pham Anh Tuan warns that in case of excessive adjustment, investment costs for real estate projects will increase, causing difficulties for both domestic investors and foreign enterprises.
For people, increasing land prices means that procedures such as changing land use purposes and granting land use right certificates will become more expensive. In particular, when converting agricultural land to residential land, the sharp increase in land use fees can cause difficulties for households wishing to legalize land.
From an expert perspective, Professor Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, emphasized the need for a central control mechanism to ensure consistency and rationality in the development of land price lists. According to Mr. Dang Hung Vo, because the current land price list is issued by the provincial level, each locality can approach and develop it in a different way, which can easily lead to unreasonable differences, especially in border areas.
Professor Dang Hung Vo suggested that the Ministry of Agriculture and Environment should have a role in appraising and checking the land price list before approval, in order to prevent the exploitation of price differences for personal gain. The most important principle is that the land price list must be consistent with the market price. However, this expert said that Vietnam still does not have a clear definition of "market price", as well as a specific legal framework to determine this price scientifically.
Regarding the participation of commune-level officials in the development of land price lists, Mr. Vo said that this is necessary because they understand the actual land value in the locality. However, it is necessary to provide clear arguments to determine whether the proposed price truly reflects the market price.
Risk of "price fever" if not well controlled
Vice President of the Ho Chi Minh City Real Estate Association Tran Quoc Dung analyzed that the current land price list is often 30-60% lower than the market price, leading to the State losing revenue and people not being compensated properly. Therefore, the 2024 Land Law requires localities to adjust the price list to be closer to reality. However, this can lead to consequences if not strictly controlled.
The first factor to note is that raising the land price list too high can cause difficulties for public investment projects due to the sharp increase in land clearance costs. At the same time, people will face obstacles in accessing housing, especially in segments such as social housing or mid-range housing. These impacts can "block" investment capital flows and create the risk of local real estate bubbles. This reality requires a solution to build a harmonious and sustainable land price list.
Mr. Tran Quoc Dung proposed digitizing land price data, updated from notarized contracts and trading platforms, to improve accuracy and transparency. In addition, it is necessary to strengthen and handle price inflation, speculation and creating virtual waves, especially in localities that are in the process of building new land price tables.
Another solution that needs to be focused on is to ensure that the composition of the land price appraisal council includes the participation of independent parties such as experts, businesses and representatives of departments and branches, in order to create objective feedback and avoid the situation of "internal price fixing".
In areas with strong fluctuations in land prices, local authorities can apply short-term measures such as zoning, suspending transfer licenses or keeping the old compensation price unchanged to stabilize the market while building a new price list.
Experts also recommend the need for a unified guidance framework at the central level, coordinated between the Ministry of Agriculture and Environment and the Ministry of Finance, to establish criteria for building a land price list that is suitable to reality, while ensuring reasonable increases to avoid shocking the market.
Source: https://doanhnghiepvn.vn/lanh-te/bang-gia-dat-moi-can-kiem-soat-de-tranh-gay-soc-cho-thi-truong/20250708081239594
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