Agricultural land is "untied", should we invest?

Mr. Nguyen Minh Hai, an agricultural land broker in Quoc Oai (Hanoi), said that in recent months, many investors have been hunting and buying agricultural land, including rice fields, making transactions in this segment very busy. Investors revealed that they want to buy cheap agricultural land to wait for high compensation or housing, according to the new regulations of the 2024 Land Law.

According to Mr. Hai, previously, the recipients of agricultural land transfers were limited to local people, even farmers from other localities were not allowed to buy, so investors had to ask someone to stand in their name. However, according to the revised Land Law, the recipients of transfers are unlimited. Therefore, this market has recently become more and more vibrant.

Commenting on this trend, Mr. Pham Duc Toan, General Director of EZ Property Company, said that the real estate market is seeing many investors and groups of investors buying agricultural land to anticipate changes under the revised Land Law. One of the changes that most investors pay attention to is the expansion of the limit for receiving agricultural land use rights transfer to no more than 15 times the local land allocation limit.

In addition, the transfer recipients are also expanded, accordingly, individuals and organizations that do not directly produce agriculture can also receive transfers.

In particular, if agricultural land is reclaimed, compensation will be made in cash or housing. This makes many investors want to "hold" the land to wait for compensation and enjoy the difference.

In addition, in the past, due to many legal and regulatory problems, the transfer of agricultural land was very complicated and the transfer value was not high. However, when the revised Land Law took effect, the problems were almost resolved, so agricultural land began to attract investors' attention again.

However, according to Mr. Toan, if investing in agricultural land at this time, investors will also face many risks.

Specifically, the recent land fever has caused agricultural land to establish a new level, so no one is currently willing to sell at a low price. Especially, if the areas are in the planning, no one will sell but they will wait to receive high compensation.

"I know there are groups of agricultural land investors who have failed, selling at a loss but no one bought. Therefore, investing in agricultural land has more risks than opportunities, so you need to be very careful.", Mr. Toan said.

Sharing the same view, Dr. Dinh The Hien also said that, from an investment perspective, buying agricultural land is ineffective. In fact, the situation of abandoned agricultural land is not rare.Buying agricultural land and hoping to make a profit like the old speculative form is very likely to fail.", Mr. Hien said.

In addition, if there are agricultural lands that are allowed by the State to be converted into commercial and service land or residential land, they must be within the approved planning of the competent authority. Therefore, collecting and purchasing agricultural land and then waiting for the purpose to be converted and divided into plots for sale is very difficult to do.

Mr. Nguyen The Diep, Vice President of Hanoi Real Estate Club, also said that speculation on agricultural land poses many risks to investors. Because if a project is suspended for many years, investors will have their capital tied up.

In addition, it is very difficult, if not impossible, to convert agricultural land to other land.