What changes do the Land Law, Housing Law and Real Estate Business Law make to the real estate market?

Apartment supply is about to increase

Ms. Do Thi Thu Hang, Senior Director of Consulting and Research, Savills Hanoi, commented that the Hanoi housing market is expected to enter a “new cycle” when the Land Law, Housing Law and Real Estate Business Law take effect early from August 1.

Ms. Hang analyzed that when the law comes into effect, although the market is in a wait-and-see phase and cannot completely change because it has to wait for specific guiding decrees, some issues can still fluctuate in a positive direction. The first factor is the supply of apartments. When the supply is limited, apartment prices are difficult to stabilize and increase. However, when the 3 laws are applied, although they have not yet completely removed all obstacles, they still clear the psychology of investors, helping them to be more interested and confident in the market, making it easier to invest in project implementation, thereby promoting increased supply and stabilizing product prices.

According to Ms. Hang, even if the new supply has to wait a while longer to be completed and supplied to the market, but grasping this trend, the apartment price level in Hanoi can gradually cool down, reducing the virtual increase. "However, it should be noted that it will still take time to resolve all supply constraints as investors are currently waiting for new guidance documents to implement the project.", Ms. Hang said.

People rush to buy houses

Another development that will soon change is the psychology of home buyers. The new Real Estate Business Law stipulates that investors can only collect deposits of no more than 5% of the value of the property, and can only collect deposits in cases where the house or construction work has met all the conditions for putting it into business according to the provisions of the 2023 Real Estate Business Law.

"This helps protect buyers from the risk of capital appropriation before completing the necessary legal procedures, creating conditions for buyers to have more time to prepare finances. At the same time, this regulation helps create more confidence in transactions for the market.", Ms. Hang emphasized.

According to Ms. Hang, when buyers are no longer hesitant or afraid, they will actively trade, increase liquidity, and accelerate the market's recovery process.

Similarly, Mr. Vo Huynh Tuan Kiet, Director of Housing CBRE Vietnam, commented that the most obvious change in the real estate market is that many people have rushed to "put down money" to buy houses before the price level can change. Accordingly, the land price frame will be removed to switch to a land price list updated annually according to market prices. Along with tighter regulations for investors, project development costs have increased, leading to possible increases in selling prices in the future.

Recently, the Ministry of Finance announced that the land price list issued by the provincial People's Committee according to the provisions of the 2013 Land Law will continue to be applied until December 31, 2025. If necessary, the provincial People's Committee will decide to adjust the land price list according to the provisions of this law to suit the actual situation of land prices in the locality.

Thus, from now until the end of 2025, people will actively buy houses to "run" prices.

According to Mr. Kiet, the “game” in the real estate market will become more difficult with tighter regulations, but investors who can survive will further affirm their position and have opportunities to develop in the coming period. This means that buyers will also have their rights protected more. For those with real needs or strong financial potential, they will not hesitate to spend money like before.

Social housing "reigns"

According to Deputy Director of the Department of Housing and Real Estate Market Management (Ministry of Construction) Vuong Duy Dung, the Land Law, Real Estate Business Law, and the new Housing Law have many regulations to help remove policy obstacles for social housing.

“Previously, the Housing Law and the Real Estate Business Law had groups of problems related to the approval of investment policies for commercial housing, related to the development of social housing, conditions for real estate business recovery, real estate market conditions of participating entities (brokers, real estate trading floors)... However, when the above 3 laws came into effect, these problems were all resolved."Mr. Dung said.

Specifically, the Housing Law has added new regulations such as: Procedures for implementing social housing will be shortened and streamlined; regulations on enjoying social housing policies will be simplified; regulations on incentives for social housing investors will be made easier and other regulations on determining and calculating the purchase and sale prices of social housing.

The important issue is that the management agency needs to clarify information for real estate projects when they are put into business. In addition, the projects also need to be publicly announced on the websites of the Ministry of Construction and enterprises. Then, the transaction activities will be clearer, more transparent, attracting more investors and buyers.

One of the new policies clearly stipulated in the 2023 revised Housing Law is that the Provincial People's Committee must allocate sufficient land funds for social housing development according to the approved provincial housing development program and plan.

In addition, many preferential regulations for investors of social housing projects are also applied, such as: exemption from land use fees and land rent for the entire land area of ​​the project. More importantly, investors do not have to carry out procedures for determining land prices, calculating land use fees, exempted land rent and do not have to carry out procedures for requesting exemption from land use fees and land rent. According to investment enterprises, not having to carry out procedures for determining land use fees will help shorten procedures for investors of social housing projects.

"In the past, although there were preferential policies for social housing investors, they were not substantial, so they did not encourage and attract businesses to participate. However, with these support policies, investors will be encouraged and attracted to participate in developing social housing. Thus, the supply will certainly increase, making social housing prices suitable for many customer segments.", one expert predicted.