The era of land speculation and subdivision, known as 'phân lô bán nền', in Vietnam is reportedly nearing its conclusion. According to experts, the market is expected to transition towards prioritizing assets that are put to use, generating real value and cash flow.

Recent developments indicate a significant shift in land management policies, particularly with the introduction of Resolution 21-NQ/TW. This resolution aims to discourage land hoarding and promote the efficient use of land resources. One of its key points is the increase in costs associated with holding unused land, which is expected to deter speculative practices.

Do Thi Thu Giang, the National Director of Consulting at Savills Vietnam, emphasized that Resolution 21 is set to transform the real estate market into a more transparent and effective structure that limits speculation. The resolution outlines three main impacts:

• It aims to restrict land subdivision, especially in major urban areas, while prioritizing the development of complete housing and urban projects.
• It proposes higher costs for holding unused land through tax measures and mechanisms to address land that is slow to be utilized.
• It seeks to enhance transparency in land pricing and transactions by connecting data across land management, planning, taxation, banking, and real estate.

Giang noted that while it cannot be conclusively stated that the era of land subdivision has completely ended, it is clear that the speculative model is entering its final phase. The resolution aims to minimize land subdivision in urban areas and explore higher taxes for vacant land, making speculation less profitable.

Legal expert Hoang Ha from the Thien Quy Law Firm in Ho Chi Minh City highlighted that Resolution 21 does not prohibit investment in real estate. Instead, it is shaping a policy framework that makes profit generation through mere land acquisition increasingly difficult and costly.

Ha identified four significant changes indicating this trend:

• Changes in land holding costs, encouraging efficient land use through financial and tax policies.
• Regulating the increased value of land due to public investment and urban development.
• Restricting the subdivision and sale of land in urban areas, particularly in large cities.
• Enhancing market transparency by requiring public disclosure of land-related information.

Resolution 21 emphasizes that land must be utilized to create value, shifting the focus from merely holding land for speculative gains to developing infrastructure and housing projects. This approach is particularly relevant for large urban centers where land is becoming increasingly scarce.

In conclusion, while the resolution aims to curb speculative practices, it also recognizes the importance of genuine investment in land development. The message is clear: land must be put to use to generate value for the economy and society at large.