Thu Thiem Urban Area, Thu Duc City. (Photo: Hong Dat/VNA)
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Vietnam’s new Land Law 2024 comes into force today (August 1, 2024), and is expected to have a positive impact on the transparency, investment attraction, and valuation methods 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 Law will abolish 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. Adjustments to land prices will be made on an annual basis, taking into consideration proposals and modification requests from different regions, each with its unique market characteristics. All adjustments must adhere to a detailed set of valuation standards, strictly applying the comparison, income, surplus, and adjustment factor methods.
Ms. Tuyen believes that the new Law will positively influence real estate investment activities nationwide. The updated legal system, which will soon take effect, is expected to create 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 impact of the Law 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,” said Ms. Tuyen. “While it may not lead to immediate changes or adjustments, the new Law will lay the foundation for a more sustainable real estate market and a better business environment for investors seeking opportunities in Vietnam.”
Commenting on the new Laws related to the real estate market, Cushman & Wakefield Vietnam representatives stated that the Land Law 2024 helps remove legal obstacles 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
