The revised Law on Real Estate Business, which has just been passed by the National Assembly and will take effect from January 1, 2025, was passed by the National Assembly on the morning of November 28. In particular, this Law has regulated the subdivision and sale of land in a stricter manner than current regulations.
Accordingly, it is necessary to prevent the subdivision and sale of land plots in wards, districts, and cities of special, type I, type II, and type III urban areas; areas with high requirements for landscape architecture, central areas and around buildings that are architectural highlights in urban areas; frontages of regional-level roads and above and main landscape roads in urban areas.
Assessing the impact of the regulations on land subdivision and sale under the revised Law on Real Estate Business, according to real estate experts, the initial tightening of regulations on land subdivision and sale and free land division may reduce land trading activities. However, in the long term, it will help this market develop in a more transparent and sustainable direction.
The subdivision and sale of land plots is being tightened under the provisions of the revised Law on Real Estate Business, which will take effect in early 2025 (Illustration photo: Ha Phong).
Discussing this issue, Mr. Nguyen Van Dinh - Chairman of the Vietnam Real Estate Brokers Association - said that the demand for land is always very high while the market lacks supply from official projects.
"Many speculators have taken advantage of the opportunity to collect land, then divide it into plots to sell, split the plots, and even name the projects the same as legitimate ones to attract buyers. At the same time, they compete to inflate prices, pushing up real estate prices, causing chaos in the market," said Mr. Dinh, affirming that tightening the division and sale of land is necessary.
According to Mr. Vo Hong Thang - Director of DKRA Group's Service Consulting Department - this new regulation on subdivision will cause some investors to struggle in the initial implementation period. However, in the long term, this is an inevitable trend that will be applied synchronously in many countries, improving the transparency of the market...
Regarding land, Mr. Thang said that this market will have big fluctuations after the new Law takes effect in early 2025. Land projects in urban areas of type II and III that have been implemented and sold (with red books) are still transferred normally, and may even benefit from price benefits.
"New projects will be harder to approve, spontaneous and fragmented projects will no longer make land scarce. The supply-demand relationship will make the prices of these products increase, not decrease," Mr. Thang emphasized.
Experts predict that the situation of land division and sale of land plots for profit by speculators will face difficulties (Illustration: Ha Phong).
Sharing about this new regulation, Mr. Dinh Minh Tuan - Director of the Southern region of Batdongsan.com.vn - said that this new regulation could cause the land market to be greatly affected in terms of supply, customer base and selling price.
According to Mr. Tuan, currently 90% of the supply of land for sale on the market is products of individuals who divide and separate plots and then set up projects to sell. The type of land that is divided into plots by themselves has a diverse price, area, and source of goods, is easy to access and suitable for the finances of many buyers.
In addition, according to Mr. Tuan, the type of land that individuals self-divide is often developed in the form of "following" infrastructure or formal projects, the selling price will be cheaper than the completed land planning projects. "Even sellers and buyers prefer self-dividing land to buying formal land projects," Mr. Tuan emphasized.
He also believes that once the subdivision is tightened, the supply in the market will be narrowed, and the number of customers who can access this type of property will also decrease somewhat compared to before.
In the coming time, the land market may see a large number of large-area land products, coming from investors who hold land with the purpose of dividing and selling plots for profit. To get rid of the goods, landowners will have to accept to cut losses and reduce prices compared to expectations.
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