Some significant changes in the amended Land Law passed by the National Assembly focus on key land-related issues: regulations on compensation and support when land is reclaimed; auction of land use rights, bidding for land-using projects; principles for determining land prices, land price lists, specific land prices...

A Major Breakthrough

To begin, pursuant to paragraph 2 of Article 30, economic entities who are currently leasing property from the State and paying a single amount for the full lease time can now choose to make yearly land lease payments instead. This policy benefits enterprises and changes revenue collection to increase land profitability.

Second, the amended Land Law eliminated the land pricing structure, allowing land prices to be determined solely on market principles. Specifically, the National Assembly has approved four land valuation techniques: comparison, income, residual, and land price adjustment coefficient methods.

After receiving permission from the National Assembly's Standing Committee, the government is entrusted with regulating alternative valuation systems that have not yet been stated by law. This is seen as a significant advancement in land management and usage, substantially altering economic difficulties in land law regulations. Depending on the project and its capacity to compensate and clarify, the State can change the K coefficient favorably.

Third, strengthening the requirements for transferring land use rights to ensure transparency in project transfers, avoid asset loss, and protect the state's management rights over national security and social interests.

Fourth, Article 122 includes language permitting firms that violate land law requirements to "correct their faults and return to the race." This rule will provide enterprises with the option to "fix errors," consistent with the ethos of "not assaulting those who withdraw." However, sanctions must be severe enough to dissuade enterprises from "taking risks." This seeks to reduce instances of "knowingly incorrect but yet willfully acting."

Fifth, numerous sections were modified to best serve the interests of the people. As a result, landowners subject to acquisition will receive compensation prices comparable to market transaction values. This guarantees that individuals do not suffer losses and demonstrates the State's respect for the public's commitment to local, regional, and national interests. In every circumstance, rights and legitimate interests are protected.

Unblocking Stalled Projects

In 2023, almost 500 projects had their challenges rectified and resumed, increasing market confidence. However, hundreds of projects are still waiting for the modified Land Law, which includes new processes, to be unblocked and resumed; local management agencies are also waiting for new laws before approving new projects.

Although not formally effective until 2025, VARS anticipates the new restrictions in the 2024 Land Law to serve as a foundation for increased market trust. Next, it will solve business challenges, unblock blocked projects, and increase market supply to lower home prices, bringing people closer to their goal of settling.

Laws such as the updated Housing Law, Real Estate Business Law, and the most recent revised Land Law will have a direct influence on the growth of the real estate industry. The recovery process may be accelerated, and the market may soon reach a new normal phase. The condition of planning and public investment also has a significant impact on the real estate market, as new locations are authorized and declared for planning.

In 2024, the frequency of new supply releases will be more consistent and abundant than in 2023. In addition to significant investors, new investors will enter the market, providing extra supply. A "launch" of fresh supplies to the market will take place between the conclusion of the first and beginning of the second quarters of 2024. Binh Duong will become a Southern highlight, with over 10,000 new goods being launched for the first time. Ho Chi Minh City will feature around 5,000 new items, not including inventory products.

If legal procedures are completed on time and projects are not halted owing to financial issues encountered by investors, the Hanoi market is forecast to get around 15,000 flats and low-rise items. Some locations and areas that focus on infrastructure development, particularly transportation infrastructure, such as the Southwest and Southeast, may be able to satisfy high real estate supply forecasts in the near future.