Is There a New Opportunity for the Real Estate Market Post-Law Implementation?

The implementation of the three new laws, the Housing Law, the Real Estate Business Law, and the Land Law, effective from August 1, 2024, marks a significant milestone for Vietnam’s real estate market, bringing about positive changes across the country. These laws introduce updated and supplementary legal frameworks that better align with the current realities and development trends of the real estate market, fostering a more stable and consistent environment.

One notable improvement is the establishment of a more robust legal framework by addressing issues and inconsistencies caused by overlapping regulations in previous laws. This move enhances market transparency and builds trust among buyers and investors.

A highlight of the amended Land Law is the introduction of a provision for multi-purpose agricultural land. This type of land can be used not only for cultivation but also for integrating commercial, service, or auxiliary construction purposes.

This provision offers investors diverse opportunities, such as constructing homestays, warehouses, or developing eco-tourism models in areas with attractive landscapes like mountains and rivers. If well-utilized, these activities can optimize profits and increase the land’s long-term value. However, to use the land for multiple purposes, owners must meet strict conditions, including ensuring that the auxiliary area does not exceed 50% of the main area and completing registration procedures with local management authorities. This requires investors to be well-prepared in terms of legal and financial matters before tapping into the potential of this land type.

While multi-purpose agricultural land presents numerous opportunities, it also carries risks. Converting land use may be challenging if the plot is located in a conservation area or does not align with the local development orientation. Additionally, any construction on this land must be easily removable and should not hinder the primary agricultural purpose.

Furthermore, the cost of leasing this land for commercial purposes, as per the local annual land price table, is an essential consideration for investors when weighing revenue against expenses to ensure economic efficiency.

The amended Land Law opens up new opportunities, but success requires investors to be well-prepared, legally savvy, and possess a long-term vision. These factors are crucial in transforming agricultural land into a sustainable and profitable asset.

Sharing his insights, Mr. Vo Hong Thang, Deputy General Director of DKRA Group, emphasized that while the new laws present opportunities for businesses, they also necessitate continuous self-improvement and quick adaptation to the dynamic market context.

According to Mr. Thang, the market has shown positive signs in the latter part of Q3 and the beginning of Q4/2024, with improvements in both supply and demand. Notably, in October 2024, there was a 93% increase in market demand for apartments in Ho Chi Minh City and neighboring provinces compared to the same period last year. This growth was mainly driven by new projects in Binh Duong and Long An provinces, which offered complete legal documentation and rapid construction progress, thereby instilling confidence in investors.

Looking ahead to the real estate market in 2025, Mr. Thang predicts a continued recovery and upward trajectory, with more evident bright spots in 2025-2026 across most segments and regions. He foresees a focus on real estate serving actual housing needs in major urban areas, with a high and consistent demand. Among these, apartment projects with prime locations, comprehensive amenities, and reasonable prices are expected to remain the market’s centerpiece.