Evaluation of land prices key to market transparency

Land prices should be more market-based to develop transparency in the real estate market, attract more capital and promote socio-economic development, experts said at the 2022 Viet Nam Socio-Economic Forum on Sunday.

 

The draft amended Law on Land removed the State-regulated land price table and aimed to set more market-based land prices.

Former Deputy Minister of Natural Resources and Environment Dang Hung Vo highlighted the need to add definitions of market prices under international standards in the revised law.

He said that market land prices should be distinguished from the land prices in transactions.

Many countries determined State-regulated land prices at around 70-80 per cent of the market price. This is reasonable, Vo said, adding that land value should not be simply an arithmetical number but should be based on statistics.

He stressed that it was necessary to set up a database to calculate and establish market land prices.

In Viet Nam, the existing State-regulated land price table, which was used for taxation or site clearance compensation, was much lower than the market prices.

According to Dau Anh Tuan, Deputy General Secretary of the Viet Nam Chamber of Commerce and Industry, localities might face confusion when determining land prices for compensation if they follow the principle the compensation price must be consistent with the popular land price.

Hoang Van Cuong, Vice Rector of the National Economics University, said land prices should be established on the valuation of land to ensure stability because prices are a changing factor. Cuong stressed the importance of developing a land price database.

He added that the selection of realty developers must also follow market mechanisms.

Nguyen Thanh Phong of the Party Central Committee's Economic Commission said developing a transparent real estate market would bring opportunities to draw capital at home and abroad, propelling socio-economic development.

Minister of Natural Resources and Environment Tran Hong Ha said that transparency in land prices would help harmonise the relationship between the Government, land owners whose land was revoked and enterprises.

Market-based land price was expected to prevent speculation, Ha said.

Finance Minister Ho Duc Phoc said solutions to evaluate land prices should be reviewed to add amendments to the Law on Land.

In the upcoming fourth meeting, the amended Law on Land will be submitted to the legislature for consideration.

At another session on policies supporting businesses and workers for sustainable development, a representative from the State Bank of Vietnam (SBV) said policies would be revised to increase enterprises' disbursement of a 2-per-cent interest rate support package.

Chairwoman of Deloitte Viet Nam Ha Thu Thanh said that most Vietnamese companies were small and medium-sized and found it hard to access capital via commercial banks. Moreover, their collateral assets had limited value, so the loans they could obtain were insufficient to expand operations.

To fix it, the SBV would set up an inter-sectoral working group to take field trips to localities and answer their questions, hold more conferences linking businesses and banks, and work closely with ministries and agencies to tackle difficulties. 

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