Real estate prices in other countries do not rise as irrationally as in Vietnam because property values are tied to actual usage efficiency rather than speculation, thanks to high taxation, according to Professor Hoang Van Cuong, a member of the Prime Minister’s Policy Advisory Council and the National Assembly’s Finance and Budget Committee.

Cuong spoke at the seminar, themed “Livehouse - A New Generation real estate model: a solution to ease urban real estate price pressure”, held on July 3. He noted that demand for real estate initially stems from the need for accommodation, but is accompanied by a desire to own assets. However, these two objectives vary depending on the social context of each country. 

In many countries, real estate prices do not skyrocket as in Vietnam because most buyers buy housing products to use, whereas in Vietnam there is an additional motive of ownership and asset accumulation. This drives property prices up based on expectations of future gains rather than reflecting actual utilization value.

Some speculative groups exploit the lack of knowledge and herd mentality of investors to manipulate psychology, "push prices up," and "create artificial prices," disrupting market information for profit.

“In other countries, real estate value is often tied to utilization efficiency, as speculation is curbed through high taxes. For example, South Korea taxes the entire profit from property transfers,” Cuong said.

Livehouse is a multi-functional real estate model with clear legal status and specific ownership terms, a concept that has emerged recently. This is a type of housing that combines business and entertainment, typically incorporating elements like shophouse, officetel, condotel, and amenities such as swimming pools, recreational areas, and workspaces. 

Livehouse is designed to meet the diverse needs of modern living, including residence, work, business, and entertainment.

Associate Prof Nguyen Quang Tuyen, Head of the Economic Law Department and Vice Chair of the Hanoi Law University Council, noted that previously people were hesitant and lacked trust in real estate projects with fixed-term land allocation. They only felt secure with indefinite-term properties. 

However, this mindset has changed positively. Investors and buyers now better understand legal regulations, realizing that fixed-term land ownership does not mean loss of ownership upon expiration.

Citing Clause C, Article 172 of the 2024 Land Law, Tuyen explained that when the land use term expires, if people still need to use it, the State will consider extending the term, not exceeding the previous cycle. Decree 102/2024/ND-CP also provides detailed guidance on the procedures for land extension. 

Thus, Tuyen noted that investors’ rights are still protected, and fixed-term ownership models like Livehouse will likely attract more interest from customers and investors. The basic legal framework for this model is in place, sufficient to protect buyers’ legal rights and interests.

However, Tuyen stressed that for this model to reach its full potential, the legal framework needs to be more specific, with additional incentives for developers and the removal of barriers related to land and procedures. 

“The Strategic Policy Board is amending Resolution 18, and we are also reviewing adjustments to the Land Law to align with practical conditions. This is a good opportunity to integrate specific regulations for multi-functional real estate like Livehouse in the upcoming institutional improvement process,” he said.

Can fixed-term real estate lower housing prices?

Regarding multi-functional, fixed-term ownership real estate models like Livehouse, Cuong believes such products can help reduce real estate prices as they can reflect true utilization value. 

“With clear ownership terms and multi-functional utilization, these products create practical benefits while addressing the issue of price escalation driven by ownership demand exceeding usage needs,” Cuong said.

Vuong Duy Dung, Deputy Director of the Housing and Real Estate Market Management Department (Ministry of Construction), agreed that Livehouse is a new model but evolved from older ones like condotel and officetel to meet emerging market trends. Therefore, such new real estate models need acceptance and further study to encourage development, contributing to the growth of the real estate market in the future.

“New models may initially seem unclear to many, but over time, they will become familiar if implemented correctly. The basic legal foundation for this model exists, but for smooth and sustainable operation, deeper research from both investors and regulators is necessary,” Dung said.

Hong Khanh