Savills: Vietnam should remove the land price bracket

According to Savill, the method of determining market value should be stipulated as the basis for all transactions instead of using the current land price framework.

Recently, when consulting for the proposal of issuing land prices in Hanoi, applied from January 1, 2020 to December 31, 2024, the Hanoi People’s Committee proposed an average increase of 30%. land prices.

The Ho Chi Minh City Real Estate Association (HOREA) commented on the land price frame for the period of 2019-2024 to the People’s Committee of Ho Chi Minh City and the Ministry of Natural Resources and Environment, in which the proposal of the framework to keep the minimum price unchanged, but partially increased. Three maximum rates compared to the present.

Ms. Tran Thi Khanh Linh, Head of Valuation, Savills HCMC, said that the land price list for the 5-year period is quite long because the real estate price situation changes rapidly. Therefore, this expert thinks that there may be small adjustment periods such as 6 months or a year to update market fluctuations.

According to Linh, the land price is adjusted by supply and demand so it always changes. In the long term, therefore, it is advisable not to issue a fixed land price bracket for a period of up to 5 years. The fact has shown a huge difference between the price of land traded in the market and this price bracket.

“Lawmakers should only clearly stipulate mechanisms and methods for determining market value. All financial obligations related to land should be defined on the basis of market value and at the same time assigning the determination. This determination for competent, independent agencies and organizations The determination of market price of land is the optimal mechanism to limit the loss of state budget, to satisfy and satisfy all related land use, “said Linh.

At the same time, according to her, People’s Committees of provinces and cities need to be more autonomously decentralized when issuing land price lists to ensure the principles are consistent with the common market prices and the actual situation of each locality. Currently, the binding of Decree 44/2014 to localities when issuing land prices is not more than 30% of the maximum price of the framework, limiting market updates.

According to experts of Savills, if applying the current price bracket while not reflecting the value of the school makes the land acquisition disadvantage and disagreement. That makes the compensation for site clearance slow implementation and the project will be slow to go into operation, which is a factor to reduce the supply.

For investors, if under the Land Law 2013, real estate projects worth over 30 billion are not based on land price tables but must use market valuation basis to determine financial obligations. . Therefore, the adjustment of the state land price bracket does not affect the input costs of real estate projects, so the price of real estate products is not much affected.