Experts: Separate Valuation Standards Needed for Each Real Estate Segment

(VTC News) - Experts emphasize that in order to accurately determine land prices, it is necessary to issue separate valuation standards for different real estate segments.

At a thematic seminar titled “Land Valuation – A Key to Sustainable Real Estate Market Development” held on June 12, TS Nguyen Van Khoi, Chairman of the Vietnam Real Estate Association (VNREA), noted that real estate prices in the market change rapidly, while the process of data collection, valuation, and approval of specific land prices often takes several months. By the time official land price decisions are issued, market conditions may have already changed, disrupting developers’ financial plans.

Another major challenge lies in the quality of input data. In practice, issues such as underreported transaction values, off-the-book deals, and fragmented data across tax authorities, notary offices, land administration agencies, banks, and trading platforms still exist.

“No real data means no real market price,” Mr. Khoi emphasized.

Experts also pointed to the reluctance of responsibility among consulting organizations, valuation units, and approving authorities. If land is undervalued, it may lead to concerns over losses of public assets; if overvalued, projects may become financially unfeasible, preventing implementation and limiting housing accessibility.

In addition, many emerging real estate segments such as condotels, officetels, data centers, green industrial real estate, logistics facilities, and long-term rental housing still lack dedicated valuation standards.

Therefore, TS Nguyen Van Khoi proposed issuing separate valuation frameworks for each real estate category, including commercial housing, social housing, rental housing, industrial parks, logistics, tourism real estate, office buildings, shopping centers, agricultural real estate, and future-formed assets. Each category should have appropriate formulas for cash flow, risk coefficients, capital costs, occupancy rates, payback periods, and profit margins.

For social housing, rental housing, and worker accommodation, valuation mechanisms should be designed with a social welfare orientation, rather than purely commercial pricing logic.

“If borrowing costs and procedural requirements are calculated as for commercial housing, it is impossible to achieve affordable prices for low- and middle-income groups,” he stressed.

Sharing the same view, Nguyen The Phuong, Vice Chairman and Head of the Research and Technology Transfer Committee of the Vietnam Valuation Association, also supported the development of separate valuation standards for different segments such as commercial housing, social housing, worker housing, tourism real estate, offices, shopping centers, agricultural real estate, and emerging asset classes. Each segment should adopt valuation methods based on cash flow characteristics, capital costs, and risk levels.

For social housing and worker rental housing, valuation mechanisms should prioritize social objectives rather than purely commercial approaches.

He also proposed the development of a national real estate price database with interconnection across land management, taxation, notarization, banking, real estate trading platforms, auctions, and construction licensing systems to ensure more accurate reflection of actual market transaction prices.

Mr. Phuong further highlighted ongoing challenges in land valuation, particularly delays in data collection, appraisal, and approval processes. By the time valuation decisions are issued, market conditions may have shifted significantly, affecting business financial plans.

Another issue is the lack of reliable market data, including under-declared transaction prices and incomplete datasets, which complicates valuation efforts.

He also noted the “risk-averse mindset” among consultants, valuation firms, and approving agencies. Undervaluation may risk losses of state assets, while overvaluation may reduce market liquidity, hinder project implementation, and limit housing access.

In addition, the lack of clear distinction in valuation purposes—such as land use fee calculation, compensation, auctions, bank collateral, transfers, or equitization—creates further inconsistencies in application.

Regarding land price adjustment coefficients, Mr. Phuong stated that the difficulty in quantifying influencing factors such as market fluctuations, planning changes, and infrastructure conditions continues to create challenges for local authorities in implementation.

(Source: VTC News )