A pilot program allowing investors to negotiate land use rights for agricultural and non-agricultural land to build commercial housing within five years is seen as a sound mechanism.
However, due to potential difficulties in negotiating with landowners, government support will be crucial for its success.
“Hanoi’s new housing supply this year has mainly come from subsequent phases of existing urban projects or those with secondary land allocations. The number of newly approved projects is scarce," a real estate executive in Hanoi told, pointing to the persistent wave of rising housing prices.
The executive attributed escalating secondary market prices to monopolized supply. "A few years ago, homes priced at 2-3 billion VND were accessible in Hanoi, but now they’re closer to 4-5 billion VND. To address this imbalance, diverse supply from multiple projects is essential," he said.
Dr. Nguyen Van Dinh, President of the Vietnam Association of Realtors (Vars), sees the pilot program as a way to alleviate legal hurdles and encourage land access for commercial housing projects.
"This approach not only resolves legal bottlenecks in housing projects that lack residential land elements but also motivates investors, enhances housing supply, and aids the market," Dr. Dinh explained.
However, he stressed that the process would require strong government oversight. "Negotiations with residents owning land designated for housing development can be challenging due to unwillingness to sell or excessively high asking prices. In the long term, the state must play a key role in land allocation for socio-economic projects through auctions or tenders to maintain market balance and improve housing affordability," he added.
Pham Duc Toan, CEO of EZ Property, a seasoned observer of the real estate market, praised the pilot mechanism as a means to simplify land allocation and acquisition, reducing investment cycles. However, he emphasized the importance of local commitment to execution.
"The key issue is execution. Local authorities need to be proactive. Delays caused by bureaucratic back-and-forth and lengthy approvals inflate project costs and final housing prices. Addressing procedural inefficiencies is paramount," Toan explained.
Dr. Nguyen Quang Tuyen, Vice Chairman of the Council and Head of Economic Law at Hanoi Law University, supported the pilot program but cautioned against its overuse.
"Pilots should be selective to avoid widespread exploitation, particularly in converting agricultural land. Focus should begin on areas with high housing demand," Tuyen suggested.
He also emphasized that the primary market demand is for affordable housing and stressed the need for streamlined land access procedures, along with mechanisms to stimulate investment in low-income housing. Additionally, Tuyen highlighted the importance of preventing speculative practices that drive up prices.
"Policymaking for housing development must prioritize residential purposes. Idle capital directed toward land speculation creates artificial pressure, necessitating firm measures to curb such behaviors," Tuyen said.
Nguyen The Diep, Vice President of the Hanoi Real Estate Club, called for clear accountability among government bodies, stating, "When laws are enacted, enforcement must be decisive. Local governments need to actively resolve procedural bottlenecks to support investors, while enterprises must cooperate closely with authorities to implement optimal solutions."
