Land prices in Hanoi increase sharply
Hanoi City People's Committee has just issued an adjusted land price list effective until December 31, 2025.
According to Hanoi's adjusted land price list, which will be applied until the end of 2025, residential land prices in districts will generally increase by 190-270% compared to the old level. The increase in districts and communes in the town is about 150-190%. Commercial and service land in the central area is 50-100% more expensive, in the suburbs 30-50%. Meanwhile, agricultural land prices will increase by about 15%.
In particular, the land price list on many streets in Hoan Kiem district, including Ba Trieu (from Hang Khay to Tran Hung Dao), Dinh Tien Hoang, Hai Ba Trung (from Le Thanh Tong to Quan Su), Hang Dao, Hang Khay, Hang Ngang, Le Thai To, Ly Thuong Kiet, Nha Tho, Tran Hung Dao (from Tran Thanh Tong to Le Duan) has the highest price of more than 695.3 million VND/m2.
Meanwhile, according to the pre-adjusted land price list, the highest urban land price in Hanoi's inner city is 188 million VND/m2 on 3 streets: Hang Ngang, Hang Dao, and Le Thai To.
According to regulations, the new land price list of Hanoi City will be applied to calculate land use fees when the State recognizes land use rights, changes land use purposes; calculates land rent; calculates related taxes such as land use tax, income tax from land use rights transfer; calculates fees in land management and use; calculates compensation for damage caused in land management and use; calculates starting price for land auctions... Therefore, many people are concerned that housing prices will increase following land prices.
According to data from real estate consultancy CBRE, by the end of the third quarter, the average selling price of primary apartments in Hanoi (excluding VAT and maintenance fees) was VND64 million per square meter, 20% higher than the beginning of the year and nearly double that of 2020.
Thanks to the four-fold increase, apartment prices in Hanoi have almost reached those in Ho Chi Minh City. In fact, in the last quarter of the year, most newly launched projects in the capital also had prices above VND70 million per square meter.
Ms. Nguyen Hoai An - Director of CBRE Hanoi branch - assessed that the adjusted land price list of the capital is closer to market price and will have certain impacts on real estate types.
The expert said that because the increase in the new land price list is quite sudden compared to the old price list, it will affect costs related to land use fees, site clearance costs, and transfer transaction fees, which all use the land price list as the basis for calculation (or reference).
"The impact may vary between types, but may all have an impact in the direction of increasing costs for entities using, exploiting and trading real estate," the expert said.
Adjusted land price list may increase real estate prices
Ms. Pham Thi Mien - Deputy Head of Market Research and Consulting, Investment Promotion Department of Vietnam Real Estate Brokers Association - said that, on the positive side, adjusting the land price list helps the State collect correctly and fully all types of taxes arising in real estate transfer transactions.
At the same time, it helps projects have a legal basis to continue implementing and providing new supply to the market.
However, Ms. Pham Thi Mien also raised concerns that the adjusted land price list could increase real estate prices and legitimize the recent "virtual fever" prices.
According to her, in recent times, the prices of real estate in Hanoi, especially housing, have increased very rapidly, even "virtually", making the dream of settling down for people forever out of reach.
Up to now, the land price list has been adjusted in a strong upward direction, which is invisibly legitimizing the very high and "virtual" prices of the market.
In addition, the current high land price will increase project implementation costs, and investors will continue to raise selling prices even higher.
Ms. Mien also said that when applying the new land price list, investors will also face difficulties in site clearance and land recovery to implement the project.
"Determining a land price list close to the market will help harmonize the interests of the three parties: the State, investors and people. However, the current land price list increases input costs, forcing investors to increase selling prices, making it more difficult for end consumers than before," she said.
