Brian Jeffrey
Overview of a New Pilot Program for Land Use Rights
A pilot initiative has been introduced that enables investors to negotiate land usage rights for both agricultural and non-agricultural areas, aiming to facilitate the development of commercial housing within a five-year timeframe. This initiative is viewed as a potentially effective strategy.
Nonetheless, the program’s success hinges significantly on government assistance to overcome possible challenges in discussions with landowners.
Current Housing Market Insights
A real estate expert in Hanoi shared with VietNamNet that the majority of the new housing available this year has sourced from subsequent stages of existing urban developments or secondary land allocations. The current rate of new project approvals remains limited, contributing to ongoing increases in housing prices.
The expert noted that rising prices in the secondary market are attributed to a monopolized supply. “Homes that once cost between 2-3 billion VND are now approaching the 4-5 billion VND mark. To alleviate this issue, a diverse supply from a variety of projects is crucial,” he stated.
Expert Perspectives on the Pilot Program
Dr. Nguyen Van Dinh, who presides over the Vietnam Association of Realtors (Vars), regards the pilot program as a means to clear legal barriers and facilitate easier access to land for commercial housing developments.
“This method not only addresses legal challenges surrounding housing projects lacking residential land but also encourages investor participation, boosts housing supply, and supports the overall market,” Dr. Dinh elaborated.
Nonetheless, he emphasized the necessity of robust government oversight throughout the process. “Negotiating with landowners of designated housing areas can prove daunting, especially when there is reluctance to sell or unreasonably high price demands. In the long run, it is essential for the state to manage land allocation for socio-economic initiatives through auctions or tenders, which can help stabilize the market and improve housing affordability,” he added.
Insights from the Real Estate Sector
Pham Duc Toan, CEO of EZ Property and a keen observer of the real estate landscape, commended the pilot program for streamlining land allocation and acquisition, subsequently shortening investment timelines. However, he highlighted the need for active engagement from local authorities in its implementation.
“Execution is crucial. Local governments must take initiative. Any delays from bureaucratic processes and prolonged approval times can inflate costs and housing prices. It’s vital to tackle these procedural inefficiencies,” Toan remarked.
Cautions Regarding the Pilot Initiative
Dr. Nguyen Quang Tuyen, Vice Chairman and Head of Economic Law at Hanoi Law University, supported the pilot program but warned against its extensive implementation.
“It is important to be selective with pilot projects to prevent misuse, especially with regard to agricultural land conversions. The focus should target high-demand housing areas,” Tuyen suggested.
He also noted that the predominant market demand is for affordable housing. Streamlined land access procedures and incentives for low-income housing investment are necessary, alongside measures to curb speculative practices that can drive up prices.
Calls for Accountability in Government
Nguyen The Diep, Vice President of the Hanoi Real Estate Club, urged for clear accountability from governmental agencies, stating, “Once laws are established, their enforcement must be strong. Local authorities should actively address procedural delays to aid investors, while businesses must collaborate closely with these bodies to find the best possible solutions.”
