Will the 2024 Land Law Disrupt the Real Estate Market?

The upcoming 2024 Land Law is expected to bring about significant changes in the real estate market. While it presents opportunities for development, it also poses numerous challenges for land users. Experts believe that real estate companies will benefit greatly from the law, as it allows them to access land through administrative decisions rather than relying on market mechanisms like negotiations with land users.

However, the land recovery mechanism, which is closely tied to auctioning land use rights, project bidding, and resource allocation, poses a significant challenge for businesses. The Land Law aims to promote economic and social development by managing and utilizing land resources efficiently. It also aims to ensure fairness and stability while balancing the interests of the state, land users, and investors.

To achieve these goals, the 2024 Land Law emphasizes the importance of professional development in the real estate sector. It establishes guidelines for land management, exploitation, and usage to ensure the market’s fairness, transparency, and competitiveness. The law also encourages the consolidation of small businesses into larger corporations to enhance their competitive edge.

The law’s auctioning and bidding processes will be conducted in a transparent manner, utilizing digital platforms. This will limit the opportunities for “backdoor deals” and illegal practices that have hindered the effective utilization of land resources in the past.

Additionally, the law only applies land recovery to large-scale projects with comprehensive infrastructure, ensuring that it is necessary to promote economic growth, urbanization, job creation, and better living conditions. Small-scale projects with localized impacts will not be subject to land recovery mechanisms.

Overall, the 2024 Land Law will reshape the real estate market, favoring professional and competent developers. The number of real estate projects may decrease, but the scale and quality will improve, along with the infrastructure and amenities. The law will promote a more competitive and professional market environment.

The law also addresses the issue of land hoarding by enforcing annual land lease payments rather than one-time payments. This measure aims to prevent businesses from holding valuable commercial land in anticipation of price increases or changing the land’s purpose for residential use. With annual lease payments, developers will be required to complete construction projects based on approved plans before selling or leasing the property.

The implementation of the 2024 Land Law will undoubtedly present significant opportunities for economic growth and transform land into a valuable domestic resource. However, it is crucial for all stakeholders to understand the law, develop sound legal and financial strategies, and adapt to the changes effectively. Failure to do so could lead to negative consequences in the face of the upcoming legal cycle.

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