AUGUST 2024 CENTRAL VIETNAM REAL ESTATE NEWS SUMMARY

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2. AUGUST 2024 CENTRAL VIETNAM REAL ESTATE NEWS SUMMARY

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   1. From August 1: Real Estate Brokers Must Have A Practicing Certificate.
   

1. The 2023 Real Estate Business Law mandates that organizations and individuals involved in real estate business must establish enterprises or cooperatives according to the law. Article 61 requires individuals practicing real estate brokerage to have a practicing certificate and to work within a real estate trading floor service enterprise or a brokerage service enterprise, thus eliminating freelance real estate brokerage.

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   Mini apartments, defined as housing with two or more floors and designed for sale, lease, or a combination thereof, will now be issued pink books (certificates of land use rights and ownership of houses). This applies to buildings with at least 20 apartments intended for rent.

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   The law also removes the time limit on apartment ownership, focusing instead on the term of use of the apartment building. When a building’s lifespan ends and it must be demolished due to safety concerns, the value of the house itself ceases, but the residential land use rights remain stable, and owners will receive compensation. This change aims to provide long-term stability and security for property owners.

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Source: tuoitre.vn

2. In Which Cases Are Land Use Fees Exempted Starting Today, August 1?

The government has issued Decree 103/2024/NĐ-CP, detailing regulations on land use fees and land rental fees, effective from August 1. The decree specifies conditions for exemption and reduction of land use fees. Exemptions include:

Housing policies for war invalids, those incapable of working, and families of martyrs without a primary breadwinner.
Poor individuals or households, and ethnic minorities in economically and socially disadvantaged areas, border regions, or islands.
People relocating due to state land reclamation that threatens human life.
Families and individuals forced to relocate due to state land reclamation without eligible compensation and without other housing in their local administrative area.
Infrastructure projects for cemeteries and cremation facilities for social policy beneficiaries.
Ethnic minorities and poor households converting non-residential land to residential land in disadvantaged areas.
Land allocated for families and individuals contributing to the revolution.
Social housing projects, housing for armed forces, and reconstruction of old apartment buildings.

Additional exemptions may be proposed by relevant ministries, sectors, and provincial People’s Committees, subject to approval by the Ministry of Finance and the Government.

Source: cafef.vn

3. How Will The Regulations For Depositing A House On Paper Change From August 1?

The new regulations will significantly impact the real estate market:

Land Price Determination (Decree No. 71/2024/NĐ-CP): Standardization: Standardizes land price determination methods, enhancing transparency and reducing disputes. Market Impact: Aligns land prices with market conditions, potentially stabilizing the market.

Compensation, Support, and Resettlement (Decree No. 88/2024/NĐ-CP): Fair Compensation: Ensures fair value for land acquired by the state, reducing conflicts and promoting smoother land acquisition.

Market Movement: Clear guidelines may accelerate development activities.
Housing and Real Estate Market Information System (Decree No. 94/2024/NĐ-CP): Data Management: Promotes data-driven decision-making and attracts investors. Efficiency: Improves transaction speed and market liquidity.
Housing Construction (Decree No. 95/2024/NĐ-CP): Regulation on Multi-story Buildings: Ensures compliance with standards, enhancing housing quality and safety. Small-scale Projects: Improves overall housing quality by regulating smaller developments.

Detailed Real Estate Business Regulations (Decree No. 96/2024/NĐ-CP): Operational Standards for Real Estate Exchanges: Professionalizes exchanges, reducing fraud. Anti-Money Laundering: Enhances market integrity.
Apartment Renovation and Reconstruction (Decree No. 98/2024/NĐ-CP): Emergency Relocation: Ensures resident safety and promotes urban renewal.
Basic Land Investigation and Registration (Decree No. 101/2024/NĐ-CP): Timely Procedures: Improves market efficiency with faster registration and certification.
Land Support for Minorities (Decree No. 102/2024/NĐ-CP): Support for Ethnic Minorities: Promotes social equity and stability.
Land Use and Lease Payments (Decree No. 103/2024/NĐ-CP): Payment Reductions: Encourages development in disadvantaged areas.

These regulations aim to enhance transparency, fairness, and efficiency, promoting stable market growth.

Source: xaydungchinhsach.chinhphu.vn

4. Land Without Official Documents Before July 1, 2014, Will Be Granted A Land Use Rights Certificate.

1. The 2024 Land Law of Vietnam introduces significant updates for granting land use rights certificates (“sổ đỏ”) for land without official documents, effective January 1, 2025. Key provisions include the categorization of undocumented land into three groups based on usage periods: before December 18, 1980; between December 18, 1980, and October 15, 1993; and between October 15, 1993, and July 1, 2014. All groups must meet conditions of being dispute-free, free from legal violations, and compliant with land-use planning to qualify for land use rights certificates.

    

   The law extends the recognition period for undocumented land use by 10 years compared to previous regulations. It also offers special provisions for households or individuals in economically disadvantaged areas who have used agricultural land for residential or non-agricultural purposes before July 1, 2014. These users can receive land use rights certificates without paying fees if their land is registered, dispute-free, and compliant with planning.

    

   Additionally, the law provides for the recognition of stable agricultural land use, granting certificates for land within legal allocation limits, while excess land may need to be leased from the state. Overall, the 2024 Land Law revises 180 articles from the 2013 Land Law and adds 78 new ones, aiming to address various land use scenarios and ensure clearer legal frameworks for land ownership.

    

   Source: cafef.vn

5. The Ministry Of Natural Resources And Environment Requires Adjustment Of The Land Price Framework.

1. The Ministry of Natural Resources and Environment (MONRE) has just required provinces and centrally-run cities to adjust, revise and supplement the current land price framework.

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   The reason for this requirement is that some localities are currently abusing the land prices in the existing price framework (promulgated under the 2013 Land Law) as the starting prices for land use rights auctions. This has led to a huge gap between the starting price and the auction winning price, causing a situation of exploiting auctions for profiteering and disrupting the real estate market.

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   This issue mainly stems from the old regulations on the land price framework, causing the price framework to no longer accurately reflect the actual market reality. The fact that some localities have been slow to update land price fluctuations has also contributed to exacerbating the situation.

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   The 2024 Land Law has created conditions for localities to proactively adjust the land price framework to suit the actual situation, in order to ensure transparency and fairness in the process of land allocation and auctions. Since the beginning of August 2024, some auctions in areas such as Hoai Duc and Thanh Oai have attracted a very large number of participants, with thousands of registration dossiers.

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   MONRE requires localities to urgently review and adjust the land price framework to accurately reflect the actual market situation, in order to avoid the situation of abusing auctions for profiteering. This is to ensure transparency, fairness and avoid disrupting the real estate market, affecting socio-economic development.

   In general, the adjustment of the land price framework will have a positive impact, contributing to the stabilization and healthy development of the real estate market in the time to come.

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Source: cafef.vn

6. The Return Of Affordable Real Estate.

In 2023, the real estate market in Vietnam faced numerous challenges, but a “genuine cleansing” of the market could create more optimistic prospects for the future. Notably, the affordable housing segment is making a comeback, driven by new policies from the Ministry of Construction and a national housing strategy that focuses on social housing and housing for low- to middle-income individuals. These developments aim to address the imbalance in the housing market.

Recently, affordable housing projects in Ho Chi Minh City and surrounding areas have seen strong demand, with new developments priced within reach of average buyers. For example, projects like Akari City and Flora Panorama in Ho Chi Minh City have attracted significant interest. The return of such affordable options is viewed positively, as the market had previously been dominated by luxury properties.

Moreover, regions like Dong Nai, Binh Duong, and Long An have also seen the emergence of affordable housing projects, which have been well-received by buyers. The revival of this segment is expected to help alleviate the housing shortage in major urban areas.

However, despite the positive developments, the market still faces significant challenges, particularly in terms of financing and interest rates. The future of the market depends on how well these issues are addressed. Ultimately, the shift towards more affordable housing and the presence of financially strong, reputable developers are seen as steps towards a more sustainable real estate market in Vietnam.

Source: cafef.vn

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