Risk of a “Land Price Shock” as New Price Tables Set to Be Issued: Warnings from the Ministry of Natural Resources and Experts

As the 2024 Land Law is scheduled to take effect on January 1, 2026, the Ministry of Natural Resources and Environment (MONRE) has submitted a report to the Ministry of Finance, warning of significant fluctuations in land prices in many localities. With provinces and cities urgently drafting new land price tables to replace outdated ones that are said to be far below market levels, multiple challenges are emerging for the real estate market, taxation, and people's livelihoods.

Land Price Fluctuations May Trigger Chain Reactions in the Market

According to MONRE, the removal of the government’s land price framework and the implementation of new regulations on land price tables have made land management more transparent and market-oriented. Rising land prices are expected to help increase state budget revenues and create more agreement from land users during land acquisition processes.

However, many localities have not updated their land price tables in a timely manner to reflect actual market values. In some cases, land prices listed in official tables remain significantly lower than real transaction prices, resulting in lost tax revenue and unfair compensation for affected residents. On the other hand, some provinces have set prices too high, creating obstacles for land-use conversion and investment.

MONRE warns that the nationwide implementation of new land price tables in 2026 could result in sharp price hikes in certain areas, potentially shocking the market if not managed carefully.

Temporary Measures and Long-Term Strategies: A Call for Transparent, Phased Implementation

To address this risk, MONRE and the Ministry of Finance are working together to build a framework of criteria guiding provinces in determining land prices closer to market value. Authorities are also urged to:

• Monitor market movements closely;

• Gradually develop a comprehensive land price database down to each land parcel.

In areas with rapid price changes, local governments may temporarily apply stabilization mechanisms such as:

• Zoning for tighter control;

• Restricting land transfer permits;

• Maintaining previous compensation rates for a short period to stabilize market sentiment.

Provincial governments are also authorized to adjust their current land price tables to better reflect actual market conditions, but such adjustments are only valid until December 31, 2025, before the new pricing system takes effect.

Expert Concerns: Pushing Up Land Prices to Raise Budget Revenues Could Backfire

Mr. Trần Quốc Dũng, Vice Chairman of the Ho Chi Minh City Real Estate Association, emphasizes the need for careful planning to avoid a market shock. He warns that some localities are aggressively raising land prices as a way to boost revenues for infrastructure projects, even if this is inconsistent with market fundamentals.

“If land prices are inflated without solid justification and without consulting the public, the consequences could include skyrocketing compensation costs for site clearance and stalled public investment projects. Higher land prices also make housing less affordable—particularly for social and mid-range housing segments,” Mr. Dũng said.

He recommends digitizing the land price database, integrating real-time data from notarized contracts and real estate exchanges, to ensure price tables better reflect actual transactions. He also calls on the government to intensify inspections and crack down on speculation, price manipulation, and fake price trends, especially during the sensitive period when new land prices are being drafted.

Call for Multi-Stakeholder Feedback and Clear Accountability

Mr. Dũng stresses the importance of including a diverse range of stakeholders in land price-setting councils—such as representatives from the Department of Finance, Department of Construction, independent experts, and business associations—to ensure transparency and avoid internal manipulation.

Additionally, he proposes:

• Expanding the scope of areas and subjects covered by the official land price table;

• Narrowing the cases where specific land valuations are required;

• Clearly assigning responsibilities to each agency involved in calculating land-related financial obligations.

A Balanced, Transparent Approach Is Key to Sustainable Land Pricing

The move toward market-aligned land pricing is necessary for Vietnam’s development, but without strong oversight and transparency, it risks damaging both the real estate sector and the financial security of ordinary citizens.

Experts emphasize the need for a clear roadmap, broad public consultation, and balanced distribution of benefits among the state, land users, and businesses. Only by doing so can the new land price tables become a catalyst for growth, rather than a source of economic instability.