How does the merger of provinces and cities affect land prices?
According to Clause 2, Article 159 of the 2024 Land Law, the land price list is built according to area and location. For areas with digital cadastral maps and land price databases, a land price list will be built for each plot of land based on the value area and standard land plot.
This regulation shows that land prices are not a fixed number but are determined based on areas, locations as well as planning and infrastructure factors.
Therefore, when there are major changes in administration such as merging provinces or upgrading districts to cities, the land price list in affected areas will also be adjusted.
In many cases, real estate value often tends to increase thanks to expectations for infrastructure and urban development. This has attracted the attention of investors, creating a wave of trend growth right from the time the merger information was only the orientation.
According to Dr. Nguyen Van Dinh - Chairman of the Vietnam Association of Real Estate Brokers (VARS), the development of land price increases according to planning fluctuations is not new to the Vietnamese real estate market. History shows that every time information about new planning appears, land prices in related areas often increase sharply in the short term. The main reason comes from the FOMO (fear of missing out) mentality of investors.
According to Mr. Dinh, the merger of provinces and cities will have a positive impact on the real estate market, which can help reduce some legal procedures for project implementation, helping the market have more supply, especially in the affordable housing segment. People will have more options to buy houses at more reasonable prices.
However, real estate value to increase sustainably requires a foundation, meaning there must be synchronous development of transport infrastructure and the socio-economy. If only increased according to speculative information about infrastructure and planning, it is easy to risk burying capital and losing money.
How will the principles and bases for land valuation in 2025 affect the real estate market?
Article 158 of the 2024 Land Law stipulates that land valuation must ensure the following principles:
- Land valuation method according to market principles; properly comply with land valuation methods, procedures, and order;
- Ensure honesty, objectivity, publicity, and transparency;
- Ensure independence between the land price determination consultancy organization, the Land Price List Appraisal Council, the Specific Land Price Appraisal Council and the competent authority or person deciding on land prices;
- Ensure the harmony of interests between the State, land users and investors.
* Bases for land valuation include:
- Land use purpose for valuation;
- Land use term. For agricultural land allocated by the State to households and individuals within the limit of agricultural land allocation, agricultural land within the limit of receiving transfer of rights, it is not based on the land use term;
- Input information for land valuation according to land valuation methods;
- Other factors affecting land prices;
- Relevant legal provisions at the time of land valuation.
Thus, it can be seen that Article 158 of the 2024 Land Law sets out strict principles on land valuation, emphasizing transparency, objectivity and compliance with market principles.
Under the impact of the 2024 Land Law, land prices in areas with administrative changes due to provincial mergers will certainly fluctuate. However, the increase will certainly not be uniform and will depend on infrastructure development policies as well as transparency in land valuation.
According to experts, investors and people need to maintain a strong mentality, closely monitor planning information from authorities to make appropriate decisions, avoiding risks from virtual land fever.
