New Regulations on the Prohibition of Land Subdivision Sales in 5 Outlying Districts of HCMC

HCMC is proposing a prohibition on land subdivision sales in five outlying districts, including Bình Chánh, Hóc Môn, Cần Giờ, Củ Chi, and Nhà Bè. This proposal requires developers to complete housing construction before transferring ownership, instead of simply subdividing and selling land as before. The policy aims to ensure the synchronized development of these areas, better meet the living needs and utilities of residents, and prevent the exploitation of subdivided land for speculative purposes that complicate urban planning management and hinder sustainable urban development.

Currently, the HCMC Department of Construction is soliciting opinions on the draft Decision of the City People's Committee, which clearly stipulates the areas eligible for transferring subdivided plots with technical infrastructure in the projects within the city. This move aims to tighten control of the real estate market, prevent uncontrolled land subdivision that negatively affects urban planning, and limit residential areas that lack uniform technical infrastructure, leading to a decline in residents' quality of life.

According to the Department of Construction, this proposal is based on the provisions of the 2023 Real Estate Business Law (effective from August 1), which states that wards, districts, and cities within HCMC are not allowed to develop real estate projects for subdividing and selling land. However, outlying districts such as Bình Chánh, Nhà Bè, Hóc Môn, Củ Chi, and Cần Giờ—with five townships and 58 affiliated communes—are still considered "rural areas" of HCMC and thus fall under the jurisdiction of the City People's Committee. This means that the management of these suburban areas should focus on developing synchronized technical infrastructure and improving housing quality rather than simply subdividing land for sale.

The prohibition on land subdivision sales in suburban districts aims to tightly control urbanization, ensure that technical infrastructure and public utilities are fully constructed, and ultimately enhance the quality of life for residents. This is a crucial measure to reduce the incidence of "ghost" real estate projects, avoid unfulfilled urban planning, and protect the rights of future homebuyers. The spontaneous subdivision of land over the years has led to many areas in HCMC developing in a fragmented manner, with non-uniform infrastructure, causing difficulties in connecting transportation, providing electricity, water, and other basic utilities. This situation not only negatively impacts the overall planning of the city but also makes daily life inconvenient for residents.

This proposal has sparked many differing opinions from experts and the public. Some experts support the new regulation, stating that it will make urban planning more systematic and methodical, avoiding disorganized and inconsistent construction. This not only helps the city develop sustainably but also ensures that newly planned areas have the conditions to provide basic utilities and create a good living environment for residents. On the other hand, many are concerned that banning land subdivision sales will increase real estate prices, making it harder for low-income people to buy land to build their own houses. Owning a piece of land to self-build has long been a major aspiration for many people with moderate to low incomes, and if regulations become too stringent, this dream may become even more distant.

Some real estate experts also warn that banning land subdivision sales could lead to significant changes in the market, reducing the attractiveness of suburban areas to small investors. Land subdivision sales have traditionally been popular due to their flexibility and quick profitability. When restricted, small investors may seek other investment opportunities, leading to capital shifts and slower development of these areas. For large investors, the new policy will require adjustments to their business strategies, shifting from small-scale developments to synchronized, large-scale urban developments—this demands more resources and time but can also provide sustainable value to the market.

The policy changes are likely to have a profound impact on the real estate market in HCMC, especially in outlying districts. Many investors will need to adjust their business strategies, focusing on developing complete and synchronized urban areas instead of merely investing in subdivided land as before. This not only requires long-term vision from investors but also necessitates a commitment to developing technical infrastructure and ensuring quality and consistency with planning requirements. In the future, as this regulation comes into effect, the real estate market in HCMC's suburban areas will witness significant changes, shifting from spontaneous developments to larger, more synchronized, and higher-quality projects.

The new regulation also presents a significant challenge for local authorities in supervising and ensuring that real estate projects meet all requirements regarding infrastructure and public utilities. Inspections, monitoring of construction progress, and ensuring the quality of projects must be carried out rigorously to avoid abandoned or substandard projects that negatively affect residents' rights. HCMC authorities need to have appropriate support measures and mechanisms to ensure that real estate projects are implemented effectively, improving the urban landscape while also bringing tangible benefits to residents. This requires close coordination between regulatory bodies, investors, and the community to ensure the sustainable and comprehensive development of the city in the future.