A SERIES OF PROPOSED POLICY CHANGES COULD RESHAPE VIETNAM’S REAL ESTATE MARKET

Land Prices to Be Determined Based on Data

One of the notable proposals concerns reforming the mechanism for determining land prices.

According to the Government, determining specific land prices remains challenging due to factors such as the quality of input data, market fluctuations, and the capacity of valuation organizations. Inconsistent valuation results may make it difficult for land prices to accurately reflect actual market conditions.

Under the draft amended Land Law, the State would determine land prices based on relevant data and appropriate valuation methods, while strengthening connections with specialized databases.

The approach is intended to improve transparency in land valuation, limit the emergence of unrealistic prices, and provide a more appropriate basis for regulating the additional value generated from land.

At the same time, simplifying administrative procedures and shortening processing times are also being considered as ways to reduce project input costs. This could, in turn, affect housing and real estate prices.

Changes to Compensation and Resettlement Policies

The draft amended Land Law also proposes a different approach to land acquisition and compensation. Rather than focusing solely on compensating for assets acquired by the State, the new policy would place greater emphasis on ensuring people’s living conditions after relocation.

For residential land subject to acquisition, compensation could prioritize the provision of replacement residential land or housing where appropriate.

Another issue under consideration is the sequence between land acquisition and approval of compensation, support and resettlement plans. The draft does not prescribe a single rigid procedure, instead proposing that the Government provide more detailed regulations.

However, some lawmakers have called for strict safeguards to ensure that people affected by land acquisition have adequate housing, livelihoods and stable sources of income following relocation.

Clarifying the Lifespan of Apartment Buildings

For the Housing Law, the issue of apartment building lifespan remains a major topic of discussion.

Under the proposed approach, the useful life of an apartment building would be determined based on its design documents, actual operating period and inspection results. If a building reaches the end of its designated lifespan but continues to meet safety requirements, its use could be extended in accordance with regulations. If it no longer meets technical standards, renovation or reconstruction may be required.

An important point is the need to clearly distinguish between the useful life of a building and ownership rights to an apartment.

Some lawmakers have suggested avoiding the term “time-limited apartment ownership” because it could lead buyers to believe that ownership of their apartment is also limited by the building’s physical lifespan.

If an apartment building needs to be reconstructed, the legitimate rights and interests associated with individual apartments would still need to be protected under the law. This is particularly important because an apartment is often a major financial asset that households accumulate savings for over many years to purchase.

Promoting Rental Housing Development

The draft amended Housing Law also introduces provisions aimed at expanding the rental housing segment.

The proposed framework could cover projects financed by the State or private investors, as well as accommodation for workers, experts and employees.

For State-developed rental housing, the draft proposes establishing a housing fund using various sources, including the State budget, proceeds from public assets and other lawful sources.

Meanwhile, businesses developing rental housing could receive certain forms of support, such as access to preferential financing, reductions or exemptions from certain land-related financial obligations, and infrastructure support, depending on the circumstances.

The policy direction aims to diversify the housing supply, particularly in major cities, industrial parks and areas with large concentrations of workers.

Tackling Speculation and Idle Land

Another issue being addressed through the proposed amendments is the use of financial tools to curb speculation, land hoarding and inefficient land use.

The draft seeks to restrict land subdivision and the sale of plots without associated construction in urban areas, particularly major cities. Projects that fail to put land into use within the required timeframe could also face progressively higher financial obligations.

If implemented, these measures could put greater pressure on developers to accelerate project implementation and make more effective use of their land holdings.

New Protection Mechanism for the Remaining 5% When Buying Off-Plan Property

Under the proposed amendments to the Law on Real Estate Business, another notable measure concerns a safeguard for the remaining 5% of the contract value when buyers have not yet received their ownership certificates.

The draft maintains the principle that developers may not collect more than 95% of the contract value before the buyer receives the relevant certificate.

However, the remaining 5% could be placed in a blocked account at a credit institution or handled according to an agreement between the parties. The funds would only be released once the developer completes the procedures for issuing the ownership certificate to the buyer.

The mechanism is intended to provide an additional layer of protection for homebuyers, particularly when an apartment has already been handed over but the ownership certificate has yet to be issued.

Nevertheless, some opinions suggest that controlling only the final 5% may not be sufficient. A greater risk concerns the entire amount already paid by the buyer, which can account for as much as 95% of the contract value.

Therefore, a mechanism for managing buyers’ advance payments in line with project progress may need to be developed, while restricting the use of customer funds for unrelated purposes.

Potentially Broad Impact on the Real Estate Market

The three groups of proposed reforms address several core issues in the real estate market: land costs, housing ownership and use rights, access to housing, and transaction security.

If finalized with clear and practical regulations, the new policies could affect both the supply and demand sides of the market. Developers could gain a clearer legal framework for project development, while homebuyers and people affected by land acquisition could receive stronger protection of their legitimate rights and interests.

The three draft amendments to the Land Law, Housing Law, and Law on Real Estate Business continue to be considered by the National Assembly before moving toward adoption in accordance with the legislative agenda.