Whether merged localities will adopt a new single land price framework or retain existing prices remains unanswered. Without a clear resolution, changes could trigger  market imbalances, tax collection challenges, increased speculation, and unequal land access.

Administrative mergers of provinces/cities are being considered as a solution to restructure governance and promote regional development. However, in this process, the problem is how to establish land price frameworks after the mergers to avoid ‘land fever’, according to Nguyen Chau Trinh, PhD, Lecturer of Economics, RMIT University Vietnam.

Currently, no official information clarifies whether merged localities will unify land prices or maintain existing ones. It remains uncertain whether a single price will be set or if former regional prices will continue.

Current land price tables show significant disparities. Trinh noted that in Zone II of Thu Duc City (HCM City), the regulated price per Decision 02/2020/QD-UBND is VND88.2 million/sq m, while in Vung Tau City (Ba Ria – Vung Tau, it’s around VND34.14 million/sq m, and in Thu Dau Mot City (Binh Duong), it’s about VND20.86 million/sq m for similar classifications.

Real estate brokers have predicted sharp price increases in former localities like Binh Duong and Ba Ria – Vung Tau post-merger if a unified price framework is applied. 

“If this occurs, it could lead to artificial market fever, negatively impact budget revenue, and hinder residents’ ability to buy land for housing,” Trinh told VietNamNet.

He said that real estate price convergence across areas only occurs when there’s parity in living standards, job opportunities, public infrastructure, and service access, not solely due to administrative changes. 

Previous related research by economists Edward Glaeser, Joseph Gyourko and Paul Krugman shows that real estate prices only converge when there is a flow of population, investment capital, and employment from the center to the surrounding areas.

Data from 2020 to 2024 shows slow convergence between Thu Duc City (HCM City) and Thu Dau Mot City (Binh Duong). During this period, actual transaction prices in Thu Dau Mot were only 33–37 percent of those in Thu Duc, and regulated prices (the prices determined by local authorities) in Zone II remained nearly unchanged, equivalent to about 30 percent of Thu Duc’s new regulated prices. 

According to the expert, these differences show no significant signs of convergence, so applying a unified land price between the two localities will not accurately reflect market reality.

If a uniform land price in HCM City is applied across merged areas, at least three issues could arise:

First, regulated prices may exceed actual transaction prices, reducing market liquidity and tax revenue from land use rights transfers.

Second, low- and middle-income residents will find it difficult to access housing, especially in less-developed areas.

Third, the market could be manipulated, with speculation driving artificial price surges, creating ‘bubbles’, and distorting investment signals.

Transitional period

To address these potential issues, Trinh said land pricing should be conducted in a flexible way with a transitional period and reasonable zone division.

Authorities should allow existing price tables to remain for a set period post-merger (e.g., 2–5 years) to avoid abrupt changes and ensure stability for residents and investors.

In the next phase, a new land price table could be issued for the entire locality, divided into zones such as central areas and satellite regions, or based on urban development and infrastructure levels. 

“Transparency in information is crucial. Additionally, anti-speculation tax policies, real estate cash flow controls, and land development project management must be strengthened at the same time,” the RMIT expert said.

Do Thi Thu Giang from Savills Vietnam said that during the transition, land prices should follow pre-merger tables until the new locality officially issues a unified table in accordance with the 2024 Land Law or until guidance is provided by the Ministry of Agriculture and Environment or the Government. This would ensure legal stability and continuity, avoiding disruptions in management and revenue collection.

In the long term, land price tables should be built based on clear value zoning, reflecting each area’s conditions, for example, HCM City’s inner city, Binh Duong IZ, or Ba Ria  -Vung Tau tourism areas. Authorities should also leverage digital cadastral maps and land price databases to set prices for individual plots, Giang added.

Tran Chung