Controlling Abnormal Price Hikes
The People’s Committee of Dong Nai province has issued guidance to enhance the management and control of volatile real estate prices. The Department of Construction is tasked with coordinating relevant units to review the real estate business operations of enterprises, investors, exchanges, and brokers. Any legal violations will be handled accordingly.
 Dong Nai will control real estate that is frequently resold. |
Dong Nai province will particularly focus on tightly managing the construction of houses in subdivided projects to prevent speculation and frequent reselling, which can cause price inflation and market confusion. They will also disclose real estate market information to increase transparency and curb fraudulent activities.
The Department of Construction will collaborate with the Provincial Police, the Department of Natural Resources and Environment, and the Department of Finance to review the organization of land auction, ensuring compliance with the law and transparency. They will promptly detect and strictly handle any violations in the auction process, preventing land auction manipulation for personal gain and market disruption.
The People’s Committees of the districts and the city are instructed to inspect and understand the causes of price fluctuations for each type of real estate. They will also control frequent reselling, especially in project areas and apartment complexes with unusual price hikes.
In Binh Thuan province, to prevent speculation and price manipulation as the real estate market recovers, the Department of Construction has published a list of 33 real estate projects that do not meet the conditions for transactions. These include 17 residential and urban projects and 16 tourism and resort projects, none of which are eligible for real estate business transactions as per regulations. Most of these projects are located in prime areas of Phan Thiet city and neighboring districts and towns.
Previously, these 33 projects were halted by Binh Thuan province due to developers and distributors offering reservations, placements, and position registrations to collect money from buyers. These practices are not stipulated in the Housing Law, the Law on Real Estate Business, and related legal documents.
Controlling Speculators
According to Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), the recently issued land price table by the People’s Committee of Ho Chi Minh City is more aligned with the market. Land prices in the districts have increased significantly, ranging from 2.36 to 38.8 times the previous values. Hoc Mon district leads with a 38.8-fold increase, followed by Thu Duc city with a 28.97-fold rise, while District 3 has the lowest increase of 2.36 to 9.72 times.
Despite the substantial increases in these areas, the highest land price for residential land on Dong Khoi, Le Loi, and Nguyen Hue streets (District 1) has been adjusted downward by 15.2% compared to the previous draft. The current highest price is VND 687 million/m2, lower than the previously announced draft of VND 810 million/m2.
Ho Chi Minh City needs to effectively control speculators, land brokers, and a few enterprises that may disrupt the market. |
Mr. Chau stated that the new land price table would directly affect individuals and households when applying for land-use certificates and legalizing land use rights. However, it won’t immediately impact the real estate market, as current projects are priced using the surplus method. But when enterprises acquire land through transfer to develop real estate projects, people may want to sell at higher prices, creating pressure to increase housing prices.
“For now, the adjusted land price table won’t immediately affect the real estate market because current real estate and commercial housing projects are mainly priced using the surplus method. But in the second phase, when real estate enterprises acquire land through transfer to implement real estate, urban, commercial housing, and social housing projects, people may want to sell at higher prices than before, leading to pressure to push up housing prices,” said Mr. Chau.
The HoREA Chairman also warned that authorities need to effectively control speculators, land brokers, and a few enterprises that may take advantage of this situation to inflate land prices and disrupt the market. Additionally, there is a need to strengthen legal propaganda to ensure that people, investors, and enterprises understand the new regulations.
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Vo Hong Thang, Director of Consulting and Project Development Services at DKRA Group, said that after the news of the new land price table, the price level of residential land and land with books also increased sharply. In the future, this segment will become scarce, especially for residential land with books and residential land in existing urban areas, where the consumption rate increases by more than 30%. For projects, in the short term, projects that already have land and only calculate land use fees will not be significantly affected. However, in the long run, when investors buy new land funds, they will have to compensate and clear the land, which will increase the cost and, consequently, the product price on the market. |
Duy Quang
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