Regulate the market, minimize bubble risk
The newly issued land price list in Hanoi is attracting the attention of many groups in society. The removal of the land price framework and adjustment of the price list according to the market is expected to bring about important changes in the socio-economic development and real estate market.
Previously, the difference between the land price according to the list and the market price created conditions for some groups to profit by under-declaring the transaction value. With the new policy, the land price is adjusted closer to reality, helping to limit budget losses and strengthen supervision of buying and selling activities.
For transfer transactions, the land price approaching the market price also helps buyers and sellers have a clearer basis for negotiation. Sellers are not forced to lower prices too much, while buyers avoid the risk of being pushed too high. This also encourages the participation of long-term investors and gradually eliminates speculators who only aim for short-term profits from "surfing", pushing up real estate prices.
Regarding this issue, Dr. Can Van Luc said that land valuation according to market principles is the most important new point, creating conditions for land valuation close to market prices, resolving land price inadequacies, especially the phenomenon of two prices, serving as a basis for compensation, site clearance, financial obligations to the State, determining real estate prices, calculating effective project investment costs and clearly defining the responsibilities of related parties.
In the long term, the new land price list is expected to play a role in regulating the market, helping to minimize the risk of a real estate bubble. When land prices are closer to reality, investment capital will be allocated more reasonably, focusing on projects with real value instead of pouring into areas with inflated prices.
This not only promotes sustainable market development but also creates conditions for real estate businesses to grow stronger and more professional.
Stabilize real estate prices
Ms. Nguyen Thi Hong Van - Deputy Director, Valuation and Financial Consulting Department, Savills Hanoi - commented that the policy of removing the land price framework and adjusting the land price list according to the market will contribute to stabilizing real estate prices.
The analyst said that real estate prices in Hanoi are still growing mechanically due to natural factors such as demand, improved income, population growth and urbanization. However, a sudden increase in the near future is unlikely.
The reason for the previous price increase was mainly due to speculative buying and selling activities. This group now has to consider more carefully when participating in the market, when the increase in real estate prices must be higher than the cost of capital, the cost of using financial leverage as well as the cost of income tax from real estate transfer calculated on the new land price list closer to the market.
“The adjustment of land price list will have a positive impact on the parties involved in real estate development projects. For people with land in the planning project, they will receive appropriate compensation for site clearance, close to market value, minimizing social disputes.
On the investor side, negotiations and site clearance will be carried out more smoothly and quickly. In return, businesses will have to have good financial potential, research and calculate investment problems carefully to build optimal development plans to bring to the market projects of large enough scale with synchronous infrastructure and outstanding utilities to attract customers and achieve the expected selling price" - Ms. Van said.
