Rumors that land prices in HCMC will skyrocket once the new price list replaces the current fixed price framework next year have made investors worried about the land conversion fee, so investors are trying to sell their agricultural land at a discount.
The fee will be calculated based on the price difference between the original and new land use. The Ministry of Finance announced on Monday that the new land prices and fees will apply from 2026.
Nguyen Tan Phong, 43, is selling his 3,800-square-meter property on Truong Van Da Street in Binh Chanh district for 12.5 billion VND (497,000 USD).
He had bought it in 2021 for VND16.3 billion amid rumors that property prices in Binh Chanh would rise by 30-40% as the district was to be elevated to city status.
“I bought the property in the hope of converting it into residential land,” he said.
But last year the market collapsed and there was virtually no demand for agricultural land. Since then, he has not been able to sell it.
In the city’s draft price list, residential plots on Truong Van Da Street have increased 18-fold to VND 14.4 million per square meter.
“I can’t afford the fees for converting the land, so I reduced my price by nearly VND4 billion just to get rid of it. Still, I haven’t found any buyers,” Phong said.
Nguyen Van Manh, who owns several 1,000 to 2,000 square meter agricultural plots along National Highway 50 in Binh Chanh, is in a similar situation.
He bought them in 2019 and 2020, but has not exchanged them yet.
With prices in this area expected to rise ten to twenty times, he estimates that switching fees will rise three to five times.
“Large agricultural properties are difficult to sell and with the increased conversion costs, landowners like me now have a lot to worry about.”
In the rural districts of Binh Chanh, Hoc Mon, Cu Chi and Can Gio, agricultural land is being sold at a 20–30% discount.
Dinh Minh Tuan, southern regional director of property trading platform Batdongsan, said the distress sales began in 2023 and escalated in recent months, especially after the announcement of the new price list.
He says this trend is not limited to HCMC, as investors in neighboring provinces are also trying to sell their land.
Data from Batdongsan shows that land prices – both for agricultural and residential purposes – in HCMC and southern provinces such as Dong Nai, Long An and Binh Phuoc fell by 6 to 13 percent in the second quarter compared to the same period last year.
The Vietnamese Real Estate Agents Association reports that the agricultural and forestry land segment was sluggish in the first half of the year, with few transactions taking place.
Tran Hieu, an experienced real estate investor in HCMC, says he is not surprised that many investors who own agricultural land now want to sell it as soon as possible.
Profits in this segment are typically 20 to 25 percent per year, rising to 30 to 40 percent when converted to residential land, he says.
The new list is expected to increase the cost of converting agricultural land ninefold, he says, citing a 1,000-square-meter plot of land near Nguyen Van Linh Street in Binh Chanh as an example.
The fee for converting this land, currently VND6.6 billion, will rise to VND61.8 billion, he says. At this price, people would be better off buying residential land directly, he stresses.
The amendments to the Land Act also stipulate that agricultural land that remains unused for 12 to 24 months could face fines and possible confiscation if it is not used again.
This means that owners of agricultural land must quickly convert it into residential areas or use it for agriculture if they want to avoid losing their investment.
