People's Council decision on land acquisition under scrutiny

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VietNam News English - 87 month(s) ago 12 readings

Khoa hoc & Doi song (Science & Life) newspaper spoke to experts who disagree with Ha Noi People's Council's framework for land acquisition.

Dang Tung, deputy director of Nha Dat 24h Consultancy and Investment JSC

I don't agree with the price range for land acquisition in 2011 which was adopted by the Ha Noi People's Council. The proposed prices do not reflect market prices. In my opinion, the value of land must be based on various factors, particularly its location – street frontage and whether it's on a major road.

A key objective of the framework is to improve State administration. If that's the case, prices must be close to market prices – the closer the better. This would enable the functional agency to more effectively administer real estate transactions.

Furthermore, if the acquisition land price is much cheaper than market prices, project investors will face bigger problems in land clearance before contractors can start work.

As a result, projects are more likely to be delayed and the value of investment hindered.

Chau Le Yen, Thang Long Real Estate Securities

The land price range of VND2.3-81 million ($105- $4,000) proposed by the People's Council is too wide and cannot be accepted. The authority should come up with a general framework and allow details to be worked out between investors and land owners through negotiation.

It is almost impossible to come up with a land price framework that will always reflect market prices.

If the acquisition price is set close to the market price, no doubt the land compensation price would be increased.

For example, the current compensation for one square metre on Hang Bai Street in downtown Ha Noi that the project investor is willing to pay is about VND500 million ($25,000). Yet the landowner wants VND1 billion. Do you think the investor will accept the doubled price?

That's why, in my opinion, the authority should introduce an average price framework, neither too low nor too high.

It is not necessary to have the framework reflect current market price.

Dang Hung Vo, former Minister of Natural Resources and Environment

Though the new prices set for land acquisition in 2011 are a bit higher than this year's, they are still far below market prices.

However, investors may think that the decision will serve as a prelude for a higher-level decision in the near future placing land acquisition prices closer to market prices.

In my opinion, whatever the Ha Noi authorities decide, the land prices should reflect real transactions in the market. Everyone wants to have a stable real estate market. A wider discrepency between the prices regulated by law and the actual market will likely lead to a wider spread of corruption and citizen complaints.

Kieu Le Huyen, Ifisolution

A few years ago, there was a report saying that land prices in downtown Ha Noi were among the most expensive in the world.

Everyone laughed at the report, as it did not reflect the true value of the land. A few years ago, the price of one square metre of land in downtown was up to VND100 million only. Now, it has risen to VND700 million-VND1 billion per square metre.

Nguyen Van Tu, lawyer, Khanh Hung Law Firm:

There isn't that much of a change in the land acquisition price framework between 2010 and that of 2011. For residential land, there are two notable changes, such as the difference between the price of a plot having two street frontages and that of one street frontage.

Under the 2011 policy, in special circumstances, the People's Committee would be authorised to adjust the price of non-agricultural land by a maximum of 20 per cent of the official price.

The wide ranges in the 2011 price framework will have a critical impact on new development projects. The actual price of real estate in these areas is much higher than regulated.

The newly introduced land price will not serve as an effective tool for the Government to stabilise the economy. The People's Council should simply provide a broad legal framework for the People's Committee to exercise its discretionary authority. — VNS

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