Postponing the passage of the revised Land Law, what will happen to the real estate market?

Not approved is reasonable!

The draft amendment to the Land Law agreed by the Government and the National Assembly Standing Committee has not been approved at the 6th session. How will this affect the real estate market?

Share withreporter,Mr. Nguyen Van Dinh, Vice President of the Vietnam Real Estate Association, said that many projects are waiting for a new mechanism to be resolved, so that they can continue to operate; many government agencies are also waiting for new regulations for approval. However, the revised Land Law has not been passed, creating a mentality in the market that businesses have to wait longer.

However, Mr. Dinh said that it was right not to pass the project to amend the Land Law, because in the draft of this law there are still some contents that cannot be resolved if promulgated; sometimes it will cause new difficulties such as land allocation, land lease, site clearance, compensation, etc.

"It is reasonable and correct not to pass the draft amendment to the Land Law to consider the issues more carefully at the next session," Mr. Dinh assessed.

From a business perspective, Mr. Vu Cuong Quyet, General Director of Dat Xanh Mien Bac, said that the new Land Law has not been passed because there are many contradictions and disagreements. Therefore, postponing it until next year is reasonable.

“The Land Law is very important. If it is done hastily and passed hastily without assessing its impact in detail, then introducing a new law may not necessarily have a good effect, or even have the opposite effect. Therefore, it is correct that the National Assembly has not passed the Land Law at this 6th session. It needs more time for careful study,” Mr. Quyet assessed.

According to this leader, businesses and project owners always hope that the new Land Law will cover all current issues of the old law and resolve the issues of the old law.

“Real estate businesses always want to have land to develop projects. Methods of land valuation, land allocation, auction, bidding, and how to calculate land tax correctly... are issues that businesses are concerned about.

Or the issue of land clearance, there are many projects that have been cleared and compensated up to 90-95% but still cannot develop, leading to "deadlock". All these issues need to be legalized with detailed regulations to help businesses operate smoothly," Mr. Quyet said.

Market continues to be difficult?

Meanwhile, Mr. Nguyen Anh Que, Chairman of G6 Group, commented that if the Land Law is delayed, the real estate market will continue to face difficulties, at least until the law is passed and takes effect.

He explained that recently, the real estate market has been in a crisis of supply and transaction volume, leading to low investor confidence as well as affecting the growth rate of the economy, capital circulation and absorption.

“Investment procedures have long been complicated, and overlapping laws have made project implementation time-consuming. It usually takes 3-7 years for the entire process, not to mention many projects take even longer, about 7-12 years.

When the Land Law has not been passed, the existing problems in investment procedures remain, causing supply to remain limited. The supply crisis will last at least 2-3 more years. This affects the psychology of investors, especially investors who are having to "bear" costs... In the near future, the issue of project mergers and acquisitions will be stronger, investors will be forced to sell quickly to restructure capital sources," Mr. Que analyzed.

According to the Chairman of G6 Group, the strange thing about the real estate market is that when supply is low and liquidity is low, prices do not decrease, but tend to increase, especially in the apartment segment.

“It is expected that social housing will solve the supply problem and lower the price of commercial apartments, but the law has not been passed yet, the supply of commercial housing is increasingly scarce, and investors are not in a hurry to sell at low prices. It is possible that apartment prices will continue to rise, affecting people's ability to buy and access housing.

For the land segment or the segment that does not depend much on the Land Law, Housing Law... in the near future, it will be the main supply source for investors; this will lead to land prices increasing, but the increase will be slow," Mr. Que commented.