The amended Land Law was ratified by the National Assembly at the fifth extraordinary session. It is expected to take effect on January 1, 2025.

The new law, together with the Housing Law, Law on Real Estate Business, will help shorten the time needed to recover the real estate market.

Vu Kim Giang, president of SGO Group, said the amended law will bring positive factors to the property market, enterprises and people.

“The amended law has provisions suitable to the present and market development orientation in the future,” he said. “The law has solved a lot of problems enterprises met previously."

“The problems on land allocation and land-use rights transfer have been legalized,” he explained.

Also, land valuation and standard valuation methods, which have been long awaited by local authorities, have been concretized in the amended law. Once the important issues are solved, this will help speed up projects stuck because of unclear regulations.

Le Hoang Chau, chair of the HCM City Real Estate Association (HOREA), said the 2024 Land Law has a new chapter on the development, management and exploitation of land banks, while the 2013 Land Law did not have this chapter.

The amended law stipulates that the development of land banks must be in line with land use planning, and that land must be used for the right purposes in an open and transparent manner.

According to Chau, if the principles are strictly observed, the state’s institution in charge of land bank development will become the biggest land bank provider in the primary land market, serving socio-economic investment and development.

Article 126 clarifies the bidding mechanism to select investors, and the responsibilities of winning investors. Winning investors are responsible for advancing capital to carry out compensation for site clearance as requested by state agencies. 

The law also stipulates that within 36 months after the results of the bids are announced, competent agencies must complete compensation and resettlement to allocate and lease land to winning investors.

Chau said that the new regulations will ensure benefits for the three involved parties, including land users who have to give back land and receive compensation; investors who develop projects; and the state as the land rent differences will go to the state budget to serve public interest.

Real estate prices

A question has been raised about whether the new provisions, including annual land price frames, auctioning and bidding, as well as compensation when taking land back from land users, will impact real estate prices.  

Experts said real estate prices depend on many factors, including site clearance costs. Once price levels used for compensation for site clearance are suitable to market conditions, the selling prices of finished products will be closer to market prices. 

Giang believes that the amendments will improve supply, and new projects will be activated.

Dinh Minh Tuan from batdongsan.com.vn said that the amended law will have a positive impact on the real estate market as clearer regulations will help realtors easily access land and develop projects, while residents who have to give back land to the state will receive better compensation.

However, Tuan said the real estate market won’t recover promptly because it will take 8-12 months to bring the amended law into life.

He believes that land prices will increase steadily, because the amended law encourages land valuation according to market prices, and improves land use efficiency.

Nguyen Anh Que, president of G6 Group, said the amended law sets two major principles: harmonizing the benefits of involved parties and optimizing state benefits. 

Previously, many people were unsatisfied about compensation when they had to give back land to the state, but now, with the amended laws, their benefits will be guaranteed thanks to the regulation that only after the arrangement for resettlement is made will the land be recovered. 

Hong Khanh