In many areas lacking infrastructure, local authorities have still applied high land price tables. Experts warn that speculative price inflation is being used as the basis for official land valuations, effectively legitimizing “virtual prices” in the market.

Nguyen Van Dinh, Vice Chairman of the Vietnam Real Estate Association (VNREA), raised the issue at a recent seminar. He said the pricing method based on market tables remains problematic due to the lack of distinction between primary and secondary land valuations. This has resulted in regions without proper infrastructure being subject to inflated uniform land tables.

“In some areas, signs of speculation and price manipulation are evident. Yet those inflated values are then used for official land pricing, inadvertently legitimizing virtual prices,” Dinh explained.

According to him, this practice increases land-related financial obligations for businesses, pushes real estate prices higher, and makes homeownership even less affordable for ordinary people.

Nguyen Quoc Hiep, Chairman of the Vietnam Association of Construction Contractors (VACC) and Chairman of GP.Invest, shared an example from a project in Hanoi. For the first land allocation of over 7 hectares, the company had to pay land use fees within 30 days. By the second allocation of 8.4 hectares, land prices had risen by 20 percent, and by the third allocation of 6.7 hectares, prices increased another 20 percent.

“Each land allocation saw a sharp price increase, pushing costs to unreasonable levels. This is the biggest limitation,” Hiep said.

He welcomed the move away from “specific land pricing” toward annually adjusted land price tables but stressed the need for clear criteria. “At one project, our company was forced to pay 2.8 times the official table price, which is unreasonable. Without clear standards, arbitrary application will create huge risks for businesses,” he noted.

Associate Professor Nguyen Dinh Tho also pointed out the wide gap between state-set land price frames and actual market prices, which directly impacts both residents and enterprises. In Hanoi and Ho Chi Minh City, many households face difficulties in converting land-use purposes because financial obligations calculated by inflated tables are too high. This affects livelihoods and undermines the investment environment.

Tho emphasized the need for fair land finance policies to ensure obligations remain reasonable for citizens while providing support mechanisms for businesses. He also underlined the importance of building a modern land database. “When cadastral records, planning data, and land-use information are digitized and integrated, management efficiency will improve, procedures will be simplified, transparency will increase, and corruption risks will be reduced,” he said.

Vo Anh Tuan, Deputy Director of the Department of Land Management under the Ministry of Natural Resources and Environment, said the upcoming Land Law amendments will address several major issues. One focus will be land-use planning. Provisions on land recovery, compensation, and resettlement will also be expanded to ease difficulties for both citizens and businesses.

He added that changes are also being considered for land allocation and leasing, particularly to address challenges arising from the transition from a three-tier to a two-tier local government model, with clearer decentralization.

The implementation of the 2024 Land Law has revealed numerous valuation obstacles, especially in calculating fair and reasonable compensation for affected households. “Ensuring people’s rights and limiting disputes while fostering social consensus must remain the priority,” Tuan concluded.

Hong Khanh