A draft land price framework for 2011 has been released by Hanoi authorities in a bid to stabilise prices in the real estate market.
The Hanoi People's Committee has recently prepared a draft land price framework for 2011.
Addressing the Building the Price in Hanoi in 2011 and Land Use Plans for 2010-2020 conference, a representative from the Hanoi Department of Natural Resources and Environment said that the capitals natural land area is now 334,662 hectares, with over 1,170 streets and arterial roads.
The Prime Minister has previously issued directives in an attempt to control land prices and stop them rising ever upwards. The Ministry of Natural Resources and Environment (MoNRE) has introduced a range of measures to implement the PM's directives, in particular amending land prices contained in Decree No 188/CP, to provide some stability.
The general principles of the land price adjustment for 2011 comply with the relevant legal provisions and move on from those for 2010. Moreover, some adjustment and additions in specific price levels in some locations and region now approach the transfer price in the market. This aims to resolve conflict and any existing inadequacies to harmonise the interests of the State, investors and the people.
Mr Nguyen Manh Hien, Deputy Minister of Natural Resources and Environment, said that land prices are currently too high in the market compared to incomes and affordability. The land price framework in 2011 will therefore not change very much, remaining basically the same as in 2010, he said. We only made adjustments to areas where we felt it necessary. Others retain their price in order to ensure the rights of citizens.
Under the People's Committee draft, the lowest land price will be VND2.3 million ($120) per sq m, in Duong Noi ward in Ha Dong district, and the highest price in central Hoan Kiem district. The minimum price in many areas therefore increases by VND540,000 ($27) per sq m compared with 2010, but the maximum has not changed.
Regarding residential land prices in communes and wards in Son Tay town, the Hanoi Peoples Committee has proposed the land price framework apply in some areas. Towns in other districts, except Tu Liem, Gia Lam, Thanh Tri, Hoai Duc, Dong Anh, Dan Phuong, and Thuong Tin, will have land prices based on the framework.
Towns in Dan Phuong, Thuong Tin, and Dong Anh districts are adjacent to other districts with high levels of economic development and better infrastructure. So, after the adjustment, land prices in these towns will be a minimum of VND1.6 million ($85) per sq m and a maximum of VND26 million ($1,353). Residential land prices in Son Tay town will be at a minimum of VND1.5 million ($76) and a maximum of VND15.600.000 ($800) per sq m.
Land prices for non-agricultural production and business districts will also increase. Prices in some residential areas remain unchanged, have fell in others but only slightly, while those in rural areas have seen small fluctuations.
Many areas have seen rapid urbanisation in recent times. Many new towns and streets have appeared, which affect land prices. Adjustments are necessary in these areas to match reality and to regulate profits gained by individuals, investors or organisations due to State investment in infrastructure. According to the Hanoi Department of Natural Resources and Environment, the draft will alter land prices in district border areas.
Towns along main roads and on main traffic routes in districts will see smaller fluctuations. When the land price framework does not change, increases in market price will be limited.
Opinions on the draft differ. One real estate expert said that when the investors buy land they must pay for a range of services but the land is then valued at a lower price. The problem has existed for a long time and is yet to be adequately resolved.
Mr Nguyen Manh, from a real estate company in Long Bien district, said that the land price they are allocated when investing was low but the cost of keeping land is high. We have to outlay on other expenditure, he said. Mr Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, said: We haven't conducted site clearance well or quickly. Complaints are many because the price is not suitable to the market price. He believes the land price framework needs to be reconsidered. We shouldn't be so slow in amending the Decree, which will affect the real estate market, he said. Some time next year, the National Assembly will consider the Land Law, which may then be amended in 2012 or 2013 .
The draft has already affected land prices, and the framework is sure to change. Mr Nguyen The Thao, Chairman of the Hanoi People's Committee, emphasised that the land use plan to 2020 must be consistent with the master plan.
The area for agricultural land by 2020 will be 151,780 hectares, accounting for 45.59 per cent of the area, 36,821 hectares less than in 2010. Non-agricultural using land will be 178,929 ha, accounting for 53.75 per cent and falling 43,928 hectares over 2010. Urban land will be 66,875 hectares, with 9454 ha of natural land and 19,054 hectares for resorts. Unused land by 2020 is to be 2,179 hectares, accounting for 0.65 per cent and 7,161 hectares less than in 2010. Some 42,295 hectares will have its land use propose altered , including 14,729 hectares in the 2011-2015 period and 27,565 hectares from 2016 to 2020.
Source: VnEconomy.vn
