The Land Law taking effect 16 months earlier than expected, and especially the major changes in the publication of land price lists, are having a clear impact on the real estate market, especially for investors specializing in land subdivision and sale.
Mr. N.V.K, a specialist in land division in the suburbs of Ho Chi Minh City, said he was "sitting on fire" because he could not submit applications to change the purpose of use for many plots of land in Cu Chi (Ho Chi Minh City), Long An, Tay Ninh. These agricultural lands are all in the planning of rural residential areas, which he had bought a long time ago and planned to convert to residential land and then divide into plots to sell when these areas were urbanized.
However, in the current context of everything being turned upside down, the frozen market makes it difficult to sell. Meanwhile, with Ho Chi Minh City about to issue a new land price list, the high land use fee makes him unable to react in time. The land price list that Ho Chi Minh City announced according to the draft decision to adjust the land price list is about 50 - 60% of the current market price. If following the old method, the land use fee and the initial land purchase price are already very high, plus the cost of making documents, advertising, commissions for the sales team... the land price must be high to make a profit. But the reality is that after the recent period of gloomy market, investors are no longer interested in land.
According to experts, one of the goals of the 2024 Land Law is to minimize the subdivision and sale of land plots, which has caused land abandonment in the past. To eliminate the widespread subdivision and sale of land plots, experts say that in addition to determining land prices according to market principles, localities need to strictly implement land use planning and plans, strictly control regulations on subdivision and separation of land plots, and prevent corruption and bribery in the performance of official duties.
Speaking at the supervision session of the Ho Chi Minh City People's Council on the implementation of state management of construction order in the city on October 11, Mr. Huynh Thanh Khiet, Deputy Director of the Ho Chi Minh City Department of Construction, said that Decision No. 60/2017/QD-UBND of the City People's Committee previously regulating the minimum area for land division in the city still had many shortcomings in handling records of people's legitimate land division needs.
It is noteworthy that the limit for conversion to residential land in localities is still very low (or even no limit), leading to people being unable to convert the land use purpose to apply for a construction permit.
In particular, the profits from buying and selling agricultural land, dividing plots and selling land in the city are very large, and some speculators have taken advantage of people's housing needs to convert land use purposes and build houses on agricultural land for business or divide a house into many small houses. This also gives rise to the situation of buying and selling agricultural land, illegally dividing plots, building on agricultural land, building individual houses for rent, forming "mini apartments" in the city.
“Currently, the Housing Law 2023 and the Real Estate Business Law 2023 no longer allow the subdivision of land for sale in wards, districts, and cities of special urban areas. However, for the district and commune levels, the law requires the City People's Committee to determine areas where projects for subdivision of land for sale are allowed. Currently, the Department has asked for the opinion of the Ho Chi Minh City People's Committee in the direction that the city will not allow projects in the form of subdivision of land for sale,” Mr. Khiet added.
