(CLO) Some opinions say that Hanoi's application of a new land price list could cause housing prices to continue to increase in the coming time.
Yesterday (December 20), the Hanoi People's Committee announced a new land price list that takes effect immediately until December 31, 2025.
According to the new land price list, Hanoi's land prices are 3.7 times higher than the previous land price list issued in 2019. Of which, the highest land price belongs to some roads in Hoan Kiem district, up to 695.3 million VND/m2.
Some opinions say that Hanoi's application of a new land price list could cause housing prices to continue to increase in the coming time.
In a report sent to the Government Office in September 2024, the Ministry of Construction said: The application of the new land price list will have a chain reaction, triggering a 15-20% increase in real estate and housing prices compared to before.
Some opinions say that Hanoi's application of a new land price list could cause housing prices to continue to increase in the coming time. (Photo: MIA)
According to the Ministry of Construction, the main costs affecting housing and real estate prices include 7 expenses, including: land use fees, site clearance compensation costs; project construction costs (housing, real estate); related taxes and fees...
Therefore, the new land price list close to the market price will increase land-related costs such as site clearance, land recovery compensation, land-related taxes and fees... while costs related to land use fees often account for a large proportion of the total cost of a housing project, ranging from 7-20% for high-rise apartment projects and 25-50% for villa and townhouse projects.
Prices between projects vary depending on location and favorable conditions of technical infrastructure. Compensation costs for assets on land usually account for an insignificant proportion, about 2%, of construction investment costs.
Meanwhile, according to the announcement of the Hanoi Department of Natural Resources and Environment, the land price list is also the basis for calculating the starting price for auctioning land use rights when the state allocates or leases land. Therefore, adjusting the price list is urgent to ensure revenue from land auctions.
In response to concerns that the adjusted land price list, which is much higher than before, will lead to increased land taxes and fees, the Hanoi Department of Natural Resources and Environment explained that the new price list helps reduce the difference, bringing land prices in the capital closer to the market.
This helps establish a synchronous policy in land management and harmonizes the interests of the State, users and those who need to use land to implement projects. As a result, budget revenue increases through the implementation of financial obligations on land of people and businesses.
In cases where land taxes and fees are high and not suitable to people's income, the Hanoi Department of Natural Resources and Environment believes that it is necessary to study reducing tax and fee rates, not reducing land prices.
"The adjusted land price list does not affect compensation and support for site clearance when the State reclaims land. On the contrary, it contributes positively to site clearance, attracting investment and developing the capital. The rights of people whose land is reclaimed are also better guaranteed, encouraging people to comply with site clearance policies," said the Hanoi Department of Natural Resources and Environment.
Talking to reporters of the Journalist and Public Opinion Newspaper, Mr. Nguyen Thanh Tuan, a real estate expert, said: The land price list in Hanoi increased 3.7 times compared to before, which could affect housing prices in Hanoi.
For houses in residential areas, especially prime land near Hoan Kiem Lake, it will not be affected too much.
“Because, when buying and selling houses, no one will normally calculate based on the land price list, but instead calculate according to the market price. For example, houses on the street frontage at Hang Ngang, Hang Dao or Dinh Tien Hoang close to Hoan Kiem Lake are priced at 900 - 1.1 billion VND/m2 according to the market price, while the new land price list is nearly 700 million VND/m2,” said Mr. Tuan.
For projects, there will be two cases. In the first case, the project land has been compensated and cleared, so Hanoi's announcement of a new land price list will not have too much of an impact. However, Mr. Tuan is concerned that some investors will use this as an excuse to recalculate apartment prices after opening for sale.
The second case is land that is in the process of compensation, Hanoi's announcement of a new land price list may cause apartment prices to increase in the near future. However, most of these cases are in suburban areas, quite far from the city center.
Source: https://www.congluan.vn/ha-noi-co-bang-gia-dat-moi-gia-nha-gia-bat-dong-san-se-tang-manh-post326806.html
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