Real Estate

Striking the Balance: Harmonizing Hanoi Land Prices with Market Realities and Social Stability

Many advocate for aligning land price tables with market rates, yet significant concerns persist regarding the potential ripple effects on livelihoods and housing costs, particularly in the realm of affordable housing.

Administrator

4 November, 2025

Land auction for 29 plots in Chu Phan commune (now Yen Lang commune) on April 4th. (Photo: Minh Nghia/Vietnam+)

Hanoi’s draft land price list for the 2026-2030 period, proposing an average increase of 25-30% in many suburban areas, has garnered significant attention from residents, businesses, and experts alike.

According to economists, the new land pricing scheme is a necessary step in land management reform. However, it also serves as a critical test for balancing urban economic development with social welfare.

While many support adjusting land prices to reflect market rates, concerns have been raised about the potential ripple effects on living costs and housing prices. Notably, the rise in social housing costs could make homeownership an even more distant dream for low-income earners.

As these figures are weighed, the voices of suburban residents—those most directly impacted—must be fully heard by authorities and policymakers. Only then can Hanoi’s 2026-2030 land price list truly reflect both the real value of land and the quality of life of its citizens.

According to the draft submitted by the Department of Agriculture and Environment to the Hanoi People’s Committee, suburban districts such as Dong Anh, Me Linh, Hoai Duc, and Thanh Tri may see increases of 25-26% compared to current rates, while central areas will only see a modest rise of 1.5-2%.

On the ground, observations in several suburban communes reveal that the proposed sharp increase in land prices has left many households and workers anxious about rising living costs and future homeownership prospects.

Residents in these suburban areas argue that when state land prices rise, compensation rates, transfer fees, and related charges are likely to follow suit. This diminishes their advantage when seeking land-use conversions or compensation for development projects.

While not opposing land price increases, residents urge authorities to ensure fairness, preventing suburban communities from being disproportionately disadvantaged.

Beyond Me Linh, in Dong Anh (Hanoi), where land prices once surged on news of a new urban development plan, many households remain cautious.

Real estate expert Pham Quang Hiep notes that a “preemptive increase” mindset has emerged in many suburban areas, particularly in communes adjacent to well-developed urban infrastructure. This raises concerns that the new land prices could trigger a chain reaction, driving up living costs across the board, from rent and commercial leases to service fees.

Higher land prices inevitably lead to higher housing costs. Le Van Binh, a developer of mini-housing projects in Hoai Duc (Hanoi), cites land clearance costs as his biggest concern.

For small-scale developers targeting first-time homebuyers, a 25-30% increase in land prices would escalate input costs, forcing sales prices upward. Ultimately, buyers would bear the brunt.

The Vietnam Real Estate Association (VNREA) warns that land prices serve as the basis for calculating land use fees, rentals, compensation, taxes, and charges. Excessive adjustments could impact both commercial and social housing prices.

While aligning land prices with market rates is necessary, a gradual approach is essential to avoid disrupting residents’ lives, particularly in suburban areas.

Legal expert Nghiem Thi Hang from the Vu Linh Law Firm (Hanoi Bar Association) asserts that land price adjustments are inevitable to reflect market realities, boost budget revenue, and enhance transaction transparency.

However, Hanoi must adopt a reasonable timeline to prevent “price shocks” that could severely impact suburban residents and small businesses.

Nghiem Thi Hang explains that policymakers must balance two conflicting objectives.

On one hand, land prices must closely reflect market rates, as per the new Land Law, to ensure transparency, prevent budget shortfalls, and minimize the gap between state and actual transaction prices.

On the other hand, abrupt increases, especially in agricultural/suburban areas, could trigger a chain reaction, raising input costs for projects, commercial housing prices, and pressure on low-income groups. Hanoi should implement phased increases, coupled with support policies, compensation for low-income residents, and adjusted compensation mechanisms.

Echoing this view, real estate expert Pham Quang Hiep suggests staggered adjustments, such as 10-15% annual increases over the first two years, rather than a single large hike. Transparent valuation data should also be made public to allow citizen oversight and dispel suspicions.

In addition to phased price increases, authorities should disclose valuation data, calculation methods, and specific location maps. Support measures, such as occupational retraining and reduced land use fees, should be provided for low-income households and those with agricultural land subject to reclamation.

Crucially, social housing prices must remain stable to avoid impacting genuine homebuyers./.

Nam Giang

– 10:18 04/11/2025