Brian Jeffrey
Recently, the HCM City Department of Natural Resources and the Environment announced an update to the 2020 land price framework but assured that this adjustment would not lead to a hike in housing prices.
Nguyen Toan Thang, Director of the department, mentioned that the existing land price framework would be utilized until 2025 and could be modified by provincial committees to align with actual market conditions.
The decision to revise the framework arose from the realization that the current framework didn’t accurately reflect the market reality. It was deemed essential to establish new price levels in line with the latest land and real estate laws.
Thang further explained that the new approach will involve a unified price framework without adjustment coefficients, based on data obtained from land transactions in the market.
While concerns were raised about the short public feedback period, lasting only nine days, Thang clarified that this was part of an expedited process approved by the HCM City People’s Committee.
It is believed that this updated framework will streamline real estate transactions, enhance transparency, and prevent revenue losses for the state.
Analysts projected that the revised land price framework could influence the real estate sector, potentially leading to an increase in housing costs due to higher land use fees based on the new price levels.
The adjustment has implications in various scenarios, including calculating land use fees, penalties for land-related violations, compensation for land losses, and selling state-owned properties.
Economists like Le Ba Chi Nhan expressed support for the move, foreseeing benefits such as improved tax revenue, market transparency, and equitable outcomes for parties involved in real estate deals.
While acknowledging a possible nominal rise in housing prices, experts believe that aligning local land prices with market rates will promote transaction transparency and fairness.
Chair of the HCM City Real Estate Association, Le Hoang Chau, predicted an immediate impact on the property market and cautioned that price adjustments could reduce demand for affordable housing.
Contrary to some concerns, the Department of Natural Resources and the Environment stated that the land price adjustment would not trigger a surge in real estate market prices, as it will not affect project input costs.
