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Thu Thiem Urban Area, Thu Duc City. (Photo: Hong Dat/VNA)
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Vietnam’s new Land Law 2024 takes effect from today (August 1, 2024), and is expected to positively impact the transparency, investment attraction, and valuation methodology in the real estate market, thus contributing to a more stable and transparent business environment.
According to Ms. Huynh Thanh Tuyen, Director of Valuation and Advisory at Knight Frank Vietnam, the new Land Law abolishes the five-year land price framework, which has failed to keep up with the actual land price fluctuations.
The land price schedule will now be issued annually, closely following market prices and reflecting any market changes. Land prices will be adjusted yearly based on proposals and modification recommendations from different regions, taking into account their specific market characteristics. All adjustments and modifications must adhere to a detailed valuation standard, strictly applying the comparison, income, surplus, and adjustment factor methods.
Ms. Tuyen believes that the new Land Law will positively impact real estate investment activities nationwide. The updated legal system, which will soon take effect, will contribute to a more transparent and stable investment environment for investors looking to expand in Vietnam. The newly issued valuation standards are more standardized, transparent, and market-oriented.
Regarding the law’s impact on property values, Ms. Tuyen stated that it is challenging to predict whether property prices will increase or decrease over time, as values are influenced by numerous factors.
However, the new law will undoubtedly narrow the gap between the land prices announced by the state and market expectations. The yearly updates to the land price schedule will ensure timeliness and keep up with the market reality.
“The new Land Law will be significantly more effective than the old legal framework. While it may not lead to immediate changes, it will lay the foundation for a more sustainable real estate market and a better business environment for investors seeking opportunities in Vietnam,” said Tuyen.
Commenting on the new laws related to the real estate market, Cushman & Wakefield Vietnam representatives stated that the Land Law 2024 helps remove legal barriers and accelerate the recovery of the real estate market. It also pushes land prices closer to market levels and improves land use efficiency.
A. Tuan
