Adjusting land prices in Hanoi and Ho Chi Minh City to be closer to the market brings transparency benefits but needs to control the risk of being exploited to push up housing prices.
The land plot in Thanh Than village, Thanh Cao commune, Thanh Oai district has an auction price 10-15 times higher than the listed price - Photo: D.T
In the context of scarce housing supply, the problem of controlling real estate prices and preventing the trick of "following the flow" is posing a big challenge for management agencies and people. The adjustment aims to ensure the rights of land users but it is necessary to control the trick of taking advantage of increasing land price brackets to increase house prices.
Central land from 600-700 million VND/ m2
According to the new land price list announced by the Hanoi People's Committee on December 20 and effective immediately until December 31, 2025, the highest residential land price is about 695 million VND/ m2 , applied to plots adjacent to the road on the central routes of Hoan Kiem district such as: Ba Trieu, Dinh Tien Hoang, Hai Ba Trung.
This price also applies to the following routes: Hang Dao, Hang Khay, Hang Ngang, Le Thai To, Ly Thuong Kiet, Nha Tho and Tran Hung Dao.
Compared to the price list issued by Hanoi City in 2019, residential land on Hang Ngang and Hang Dao streets increased 3.7 times.
Also according to the new price list just issued by Hanoi, commercial service land is adjusted to be 50-100% higher than before. The highest price for business land is still on the streets in Hoan Kiem district such as: Hang Khay, Hang Ngang, Hang Dao over 244 million VND/ m2 .
Meanwhile, prices of agricultural land, rice fields, annual and perennial crops, and aquaculture land in Hanoi also increased by about 15%.
As for the new land price list issued by Ho Chi Minh City at the end of October 2024, the highest land price in Ho Chi Minh City belongs to the three routes of Dong Khoi, Le Loi, and Nguyen Hue at 687.2 million VND/ m2 .
The new land price list that Hanoi and Ho Chi Minh City have just issued, which is close to the market, will be the basis for calculating compensation and determining land prices for people and organizations subject to site clearance. This is also the basis for calculating land use tax, personal income tax from the transfer of land use rights, fees and charges related to land use, transfer or when carrying out administrative procedures related to land.
Nguyen Hue Street is one of the streets with the highest land prices in Ho Chi Minh City - Photo: QUANG DINH
The new price frame is only 10% of the winning bid.
According to Tuoi Tre, although Hanoi has increased the land price list to be closer to the market, many areas have new price frames 3-4 times higher than the old price frames issued in 2019, but there is still a huge gap with the winning land auction prices in many areas.
For example, rural land in Thanh Lam commune, the location of the road from Duc Hau village to Thanh Van village, the price of rural land is 1.54 million VND/ m2 . Similarly, rural land on the inter-commune road in Dai Thinh commune has a price range of 1.01 - 1.54 million VND/ m2 . Meanwhile, the winning price of land auctioned in the same area in Thanh Lam - Dai Thinh urban area in 2024 is about 60 million VND/ m2 .
An area that is concentrating many apartment projects, a hot spot for price increases in the Hanoi apartment market recently, has a new, quite soft land price list. While the price of many apartment projects in An Khanh commune, Hoai Duc district is fluctuating from 60 - 80 million VND/ m2 , according to the newly issued land price list (land prices in the area near Thang Long Avenue through An Khanh commune) are only from 2.3 - 8.6 million VND/ m2 .
For LIDECO urban area, Hoai Duc district, 31m wide road, commercial, service and urban land price from 6.5 - 9.3 million VND/ m2 ; 24m wide road, price from 5.9 - 8.5 million VND/ m2 ; 13.5m wide road, price from 4.6 - 6.3 million VND/ m2 . National Highway 32 area, Phung town, Dan Phuong district, land price from 2.9 - 9.2 million VND/ m2 .
Similarly, rural land on National Highway 21B through Kim Bai town to the end of Hong Duong commune, rural land price is from 3.5 - 6.1 million VND/ m2 . Urban land on the road from Kim Bai village to Kim Bai town (section adjacent to National Highway 21B) price is 3.4 - 5.7 million VND/ m2 ; Cat Dong village road - Kim Bai town (section adjacent to National Highway 21B to the left Day dike) price is 3.4 - 7.5 million VND/ m2 .
Meanwhile, the auctioned land in Thanh Than village, Thanh Cao commune, Thanh Oai district (adjacent to Kim Bai town) has recently been pushed up to more than 100 million VND/ m2 .
Preventing the exploitation of increased land price brackets to push up housing prices
Over the past year, housing prices, especially apartment prices in Hanoi and Ho Chi Minh City, have increased sharply, causing many concerns about fluctuations in the real estate market. Experts and industry leaders have warned that local authorities need to have solutions to control the situation of taking advantage of land price adjustments to push up housing prices, exacerbating the shortage of supply and pushing many people, especially those with low and middle incomes, out of the market.
According to Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, the current high housing prices are not only due to the increase in land prices but also due to the shortage of supply. Accordingly, land costs are only one factor in the cost structure of real estate, while the important factor determining prices is the shortage of housing supply.
If there is a solution to increase supply and stimulate transactions in the market, housing prices will tend to cool down. Therefore, increasing the construction of housing projects, especially social housing, is one of the fundamental solutions to stabilize the market.
However, in the current context, with the shortage of housing in big cities like Hanoi and Ho Chi Minh City, adjusting the land price list to closely follow the market price may be a factor that pushes up housing prices. Mr. Chau warned that in addition to adjusting land prices, land rental prices in big cities also tend to increase, creating more pressure on housing prices.
Mr. Nguyen Chi Thanh, Vice President of the Vietnam Real Estate Brokers Association, said that adjusting the land price list closer to market price is a correct action, in accordance with the provisions of the Land Law.
The purpose of this is to make the market more transparent, while ensuring the rights of people in calculating registration fees, transferring or changing land use rights. Although the new land price list in central areas in Hanoi and Ho Chi Minh City is up to 600 - 700 million VND/m2, it is still lower than the actual market price. This will help encourage people to conduct more transparent transactions, while helping management agencies minimize land price inflation.
Mr. Thanh also emphasized that the new land price list is adjusted to match the actual value of areas that have been developing steadily over the past years. However, for new areas, especially those that are being converted to housing projects, there is no official land price list. Experts say that land prices in new areas can only be determined when projects are implemented and put into use, then appropriate reference prices can be given.
Finally, experts also affirmed that the purpose of adjusting the land price list is not to create a price shock but to encourage transparent market operations, minimize speculation, and inflate land prices in rapidly developing areas.
Determining land prices based on practical factors such as compensation costs, infrastructure investment and business profits will help the land market become more reasonable, avoiding abnormal land price increases, which negatively affect the sustainable development of the real estate market.
Land use fees and site clearance costs only account for 7-20%, the application of a new land price list close to the market in the coming time will increase the selling price of houses and real estate by an average of 15-20% compared to the previous period. (Ministry of Construction)
* Lawyer Nguyen Van Dinh (land legal expert):
Lawyer Nguyen Van Dinh (land law expert)
Adjusting land prices closer to the market could become an excuse for speculators to increase prices and house prices in 2025, so home buyers need to be alert when spending money to buy a house. Rising land prices can increase input costs for housing projects, but it should be noted that this is not the main factor that has pushed apartment prices sky high in recent times. The main factor is still the law of supply and demand, so management agencies and localities need to have appropriate policies to control and reduce house prices.
Source: https://tuoitre.vn/dua-gia-dat-sat-thi-truong-lam-sao-de-khong-tat-nuoc-theo-mua-20241222234740553.htm
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