As of January 2025, approximately 25 provinces in Vietnam have implemented new land price frameworks, which will remain in effect until the end of 2025. These changes are part of reforms under the Land Law 2024, which seeks to improve transparency and align land prices with actual market values.
The updated frameworks enable provincial authorities to adjust land prices periodically, allowing for a gradual shift toward a market-based valuation system. The goal is to have the system fully implemented by 2026, with the intention of reducing sudden price surges that could disrupt both land users and investors.
However, dramatic price increases in certain regions have caught both residents and businesses by surprise, causing concerns within the real estate sector.
In Ho Chi Minh City, land prices have surged by up to 38 times in some areas, with some properties now valued at VND 687.2 million (approximately USD 27,055) per square meter. Similarly, in Hanoi, prices have increased by two to six times, with the highest recorded price at VND 695.3 million per square meter. These steep price increases have raised alarms among real estate developers and investors, who are worried about reduced affordability and the potential impact on investment attractiveness.
The sharp rise in land prices has raised concerns regarding the future competitiveness of Vietnam’s real estate market, traditionally bolstered by competitive land costs, affordable labor, and efficient logistics. With rising labor and land costs, some worry that the country’s competitiveness may diminish, potentially deterring foreign direct investment.
Additionally, the complexities of the land valuation process have begun to affect project implementation. Some real estate companies have faced challenges due to unclear regulations surrounding land allocations, resulting in delays and uncertainties in project execution. Local authorities are also grappling with large discrepancies in land prices between allocation phases, which complicates the calculation of land use fees.
The Land Law 2024 introduces new definitions for commercial and service land intended for business and tourism projects such as hotels and resorts. High one-time land rental fees have been noted as a deterrent to investment in tourism projects. Some experts have suggested that land prices for such commercial and service land be set at a percentage of residential land prices to encourage investment.
Valuation issues have been a long-standing challenge in Vietnam, often delaying project approvals beyond the standard 60-day deadline, sometimes extending to one or two years. These delays have slowed development, and if not addressed, they could have broader economic implications, potentially slowing the growth of the real estate sector.
Concerns have also emerged among local residents, particularly in urban areas where the cost of living is already high. There is fear that higher land prices could lead to rising housing costs, making it more difficult for citizens to afford homes. This may exacerbate existing socio-economic disparities and create challenges for urban planning and social cohesion.
As the government works to implement these reforms, balancing transparency and fairness with the potential economic and social consequences is crucial. Experts have emphasized the need for careful consideration of the pace and scope of these changes to ensure they promote sustainable economic growth without undermining the stability of the real estate market.
The Ministry of Natural Resources and Environment has called on provincial authorities to expedite the process of determining land prices, particularly in relation to land allocated or leased before the Land Law 2024 came into effect. Local authorities are also tasked with adhering to new regulations on land pricing, ensuring that the process follows established principles and prevents land waste. Reports on the progress of land price adjustments are required by April 30, 2025.
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