Apartment and land prices 'open to bidding' under new announced land price list
Based on the assessment and actual development of the real estate transaction market, the prices of apartments, townhouses and land in Ho Chi Minh City are expected to rise significantly this year due to the increased input costs of the draft land price schedule.​
Ho Chi Minh City is organizing a consultation on the new land price list in accordance with Article 257, Paragraph 1 of the 2024 Land Law. If executed in accordance with market principles, it will be close to the market price.

The Ho Chi Minh City Real Estate Association calculated based on the draft land price list issued by the Ho Chi Minh City Department of Natural Resources and Environment that land prices for some plots in Districts 1 and 4 have increased by more than 30 times, especially in Hoc Mon District, where house prices have increased as high as 51 times.

Among them, the land price in District 1 increased by 5 times; District 3 increased by 4-9 times; District 4 increased by 11 times; Districts 5 and 7 increased by 6 times; District 6 increased by 5-11 times; District 8 increased by 4-18 times; District 10 Increased by 5-6 times; District 11 increased by 4-9 times; District 12 increased by 3-33 times; Binh Thanh District increased by 5-13 times; Go Vap District increased by 7-11 times; Phu Nhuan District increased by 7-8 times ; Tan Binh District increased by 7-12 times; Tan Phu District increased by 7-17 times; Binh Tan District increased by 9 to 17 times; City. Thu Duc increased by 6-35 times; Hoc Mon district increased by 5-51 times; Cu Chi district increased by 9-31 times; Binh Chanh district increased by 2-36 times; Nha Be district increased by 7-23 times; Can Gio The area increased by 8-23 times.

HoREA Chairman Mr Le Hoang Chau confirmed that the draft land price list will not affect specific land valuations and will not increase land use fees or land rental costs for commercial real estate and housing projects. The reason is that the land price table is not applicable to this group of projects, but the residual method is mainly used to value the land in accordance with the provisions of the 2024 Land Law.

However, the draft land price schedule will have an impact on land clearing compensation costs, as land users tend to demand higher compensation than before. Input costs are pushed up, triggering a chain reaction, causing housing prices and rents to rise; increasing land rent and factory rent costs for industrial parks and investment projects, commerce, trade, services and tourism.

This could lead to a general increase in commodity prices and have a negative impact on social housing schemes, as companies have agreed to transfer land use rights to implement the schemes.

Impact on buyers

Mr. Ngo Duc Son, general manager of DRH Holdings Joint Stock Company, said the new land price schedule has the greatest impact on people’s fulfillment of financial obligations, especially obligations such as changing land use or issuing certificates. For enterprises, high land prices mean high input and high output, which directly affects buyers. However, whether it is directly or indirectly, it will affect the operation of the enterprise.

Mr. Vo Hong Thang, investment director of DKRA Group, said in an interview with Tien Phong reporter that for real estate companies, the new land price list increases site clearance and compensation costs because it is getting closer to the market price. As the cost of land use increases, so will the taxes and fees that come with it. These factors will affect the sales price of real estate, and prices will increase in the future.

However, on a positive note, Mr Thang said the new land price schedule showed the effectiveness of the Land Law 2024, which is about to come into effect. Specifically, formulating a land price list will help shorten the legal implementation time of the project and remove legal obstacles. On the issue of compensation and customs clearance, when merchants approach the market, it will be easier for them to negotiate with the public.

Another advantage is that it solves the problem of calculating land use fees. Even if land use fees increase, the legal implementation time of the project will be shortened, and companies will also save financial costs.

"I hope that the three laws that are about to take effect will simplify the legality of projects and shorten the project permit time. Enterprises will save financial costs, business management costs will offset prehistoric costs, and reduce the rise in real estate prices. But whether the legal time for projects can be shortened, to a large extent It depends on the authorities' enforcement efforts. If a new land price table is introduced and the legal construction period of the project is extended, the cost burden of the company will increase. By then, the selling price of the house will definitely be high.

Mr. Nguyen Toan Thang, Director of the Department of Natural Resources and Environment of Ho Chi Minh City, said that the new land price schedule will bring many advantages after its implementation. The compensation price and resettlement land price shall be based on the new land price list. Real estate transactions have also become more transparent. There is no longer a "two-price" situation of buying and selling houses, and the country will not lose budget revenue. For some people who believe that the new land price list will increase real estate prices, Mr. Tang believes that this is incorrect. Previously, real estate transaction prices were much higher than the national land price list. At the same time, it is expected that the adjusted land price list will be updated through the tax authorities and land registration authorities based on actual market transaction prices.