According to Lao Dong reporters, the 2023 Law on Real Estate Business stipulates that land use rights cannot be transferred to individuals who build houses themselves, divide plots of land into plots for sale in wards, districts, and cities of special, type I, II, and III urban areas, and are subject to auctions of land use rights to invest in housing construction projects according to the provisions of the Land Law.
For the remaining areas, the provincial People's Committee will base on local conditions to determine the areas where project investors are allowed to transfer land use rights with technical infrastructure to individuals to build their own houses.
Regarding the regulation prohibiting the subdivision and sale of land, many real estate experts believe that in the next year or so, the land market will have many strong fluctuations. The tightening of subdivision will make the supply scarce and land prices may be pushed up.
Mr. Nguyen Van Dinh - Chairman of the Vietnam Real Estate Brokers Association (Vars) - said that the demand for land is always very high while the market lacks supply from official projects.
"Many speculators have taken advantage of the opportunity to collect land, divide it into plots, and even name it after legitimate projects to attract buyers. At the same time, they compete to push up real estate prices, causing chaos in the market," said Mr. Dinh.
According to Mr. Dinh Minh Tuan - Director of Batdongsan.com.vn, the ban on land subdivision and sale according to the new regulations can reduce the rampant subdivision, the supply to the market will also shrink, helping to reduce the waste of land resources.
However, land trading activities in the coming time will also be affected. In the first stage, the land market will be unstable because currently 90% of land trading transactions in the market are subdivided land.
After the regulation is implemented, there may appear a large number of large-area land products for sale at discounted prices from investors who have "held land" with the purpose of dividing and subdividing the plots for profit.
On the contrary, the prices of subdivided land plots with certificates in localities where subdivision is prohibited will be pushed up and there is a possibility of a wave of "running" to subdivide and split plots before the law officially takes effect.
Mr. Dinh Minh Tuan said that banning the subdivision and sale of land in 105 cities and towns will reduce purchasing power in these markets, but land in type I cities will attract stronger cash flow.
Investors who see this as a risky time will wait for issues related to land subdivision to stabilize before returning to these areas.
