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Vietnamese Government Raise the Price of Land Developers Hard to Make Money

Vietnam's land market there are only two land prices. The first one is based on "Land Law," by the Ministry of Finance, Ministry of Natural Resources and Environment to determine the "official price of land", Zhe Yi prices are mainly used for: land use right transfer tax calculation, when the land allocation or Zu Lin tax collection, land allocation and land valuation of the property to recover compensation. The second is "non-formal land market" or "shadow land market" price of private land transactions. The first land prices are much lower than the second, equivalent to approximately 50% of the second.

New Deal for the Vietnamese Government's land became a hot pan on the ant developer.

Will be formally entered into force in October under the Act No. 69, the Vietnamese real estate development enterprises to pay land-use and compensation will be equivalent to the full market price, rather than, as now, based on official government valuation. This Yiwei Zhao, these companies invest in real estate projects into the much higher than before - starting with the hands of land owners to purchase land, the payment of Xiangdang Yu market price of the land use and Buchang fees.

Analysts worried that the policy would force operators to open additional costs to consumers, resulting in soaring prices.

Developer profit margin is compressed

An Thien Ly, manager of King Ho Nguyen said the company bought the paper a strange city residential
land, and agreed to 4 million VND per square meter (about 1429 yuan) of the purchase price, per square plan the price of rice sold 4.5 million VND. "If under the new legislation if implemented, the company will have to pay an additional VND 4.5 million U.S. dollars per square meter of land-use fees. Therefore, companies have been forced to divest." He said.

From Binh Dan company representative said the company in Ho Chi Minh City purchased a 14,000 square meters of residential land, under the new regulations, they will pay 57 billion VND for land use fees, but also the entire project 60 billion VND worth it.

Dat Lanh Real Estate Company, vice president of Ruan Wende also agreed that the new policy is difficult to make profitable real estate development enterprises. "To a 10 thousand square meters of residential land for example, real estate company will be about 51 billion VND to sell, Qi Zhong, including payment of compensation to the land owner of 40 billion VND, Jianzao park facilities such as Gong Gong Fei Yong about VND 8.0 billion needed, together with the construction of the road for 30 billion VND, the project expects to gain about 600 million VND only. "

Might consider amending the

In this case, the developers pay land use fees are likely to fall into a loss situation, so they bound to earn through price increases after the loss.

"This new law will allow land prices soaring, as real estate companies rely on to increase the price to make up they face rising costs." Ho Chi Minh City Real Estate Association Chairman Huang Chu Lai said.

"The new regulations still need to be amended. As the market prices are based on the price of land has been set, Suo Yi Mei You either land with infrastructure construction, Du Qiang Fang Dechan company pays the same price for." Nguyen's Qin Lv Shi said.

However, this measure is also expected before the introduction of changes in the. "If the developers think we suffered discriminatory words, the relevant department will consider amendments to the new regulations." Ho Chi Minh City Department of Finance Bureau of the price war the country, Deputy Minister Nguyen responded.
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Article Added on Saturday, December 17, 2011
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