Speaking at the seminar “Land Valuation – The Key to Sustainable Real Estate Market Development” on June 12, Nguyen The Phuong, vice chair and head of the Research and Scientific Transfer Department of the Vietnam Valuation Association, noted that real estate prices are determined by multiple factors, including land value, construction costs, capital costs, and other financial expenses.

Accurately determining land values plays a critical role for businesses, investors, and the sustainable development of the real estate market.

The 2024 Land Law abolished the land price framework, replacing it with annual land price tables and requiring land prices to closely reflect market values. However, according to Phuong, businesses still face risks during the land valuation process.

The primary cause is the procedural latency in data collection, appraisal, approval, and issuance of land prices. By the time a pricing decision is officially enacted, market conditions may have already shifted, disrupting the financial plans of enterprises.

Furthermore, the quality of input data does not yet fully reflect actual market developments. The practice of declaring transfer prices lower than actual transaction values poses a major obstacle to valuation work.

Phuong said the fear of responsibility among consulting organizations, valuation firms, and approving agencies is also a concern. Undervaluation may lead to losses of public assets, while overvaluation could hurt market liquidity and create difficulties for businesses and citizens.

Also, the lack of clear distinction in valuation purposes for each type of transaction, such as calculation of land use fees, compensation for site clearance, auctions, bank mortgages, or transfers, leads to many inconsistencies in application.

Under Resolution No. 254/2025/QH15, provinces and cities must issue full bases for calculating land use fees, land rent, and land compensation before July 1, 2026. Among these, the land price adjustment coefficient is considered the most complex.

Under Decree 49/2026, the adjustment coefficient (K factor) is determined based on three factors: market fluctuations, planning conditions, and other factors affecting land values.

Duong Thi My Lang, vice chair of the Vietnam Valuation Association, said the implementation of Resolution 254/2025 and its guiding documents poses considerable challenges for both regulators and consulting firms.

While the 2024 Land Law requires annual land price tables and eliminates adjustment coefficients, Resolution 254/2025 requires local authorities to establish new land price adjustment coefficients under Decree 49.

“This is a difficult task as localities have only about six months to develop adjustment coefficients for all roads, road sections, and land categories within their jurisdictions, while the process of hiring consultants, preparing budgets, conducting tenders, and implementation alone takes at least 45 days,” Lang said.

Another issue is that the scope of application for the “land price table multiplied by adjustment coefficient” method remains unclear. Even consulting firms directly involved in the process have yet to determine which cases should apply adjustment coefficients and which still require specific land valuations.

Nguyen Thi Hue, head of the Price Management Division of the Phu Tho Department of Finance, said current difficulties are largely centered on data issues. Information sources used for land valuation remain inconsistent, while inaccurate land pricing could trigger complaints related to compensation and land clearance activities.

Hue said pressure is being placed on land management agencies and land registration offices. The collection and use of real estate transaction data must also be handled carefully to protect the rights and interests of citizens.

National land price database proposed

Nguyen The Phuong proposed that the Government pilot a new land valuation mechanism for the 2026-2028 period in localities with developed real estate markets.

For transitional projects that have already received land allocations but have not completed financial obligations, he suggested allowing provisional pricing so that businesses can proceed with implementation and settle payments later based on official land prices.

He also proposed building a national real estate price database shared by land administration, taxation, notarization, banking, trading platforms, auctions, and construction permitting systems to better reflect actual market transaction values.

A dedicated valuation framework for different segments, including commercial housing, social housing, worker housing, tourism real estate, office buildings, and shopping centers, is also needed. Each property type should have valuation methods tailored to its cash-flow characteristics, capital costs, and risk levels.

Hong Khanh