HCM CITY – Subdividing land into housing-sized pieces to sell off is rampant in HCM City, especially in suburban areas, but according to analysts and officials, it is a violation of the law and undermines urban planning.

This has become common practice especially in rural districts like Bình Chánh, Hóc Môn, Thủ Đức, and District 9, where large holdings of cheap agricultural lands are common.

The small pieces are then sold at modest prices of VNĐ150-300 million (US$6,650-13,300).

Since most lands remain designated as agricultural, there are no roads, only small, winding alleys.

Analysts pointed out that smaller lots are easier to sell and this increases the overall value of the land.

The director of a real estate company on Nguyễn Duy Trinh Street, District 9, who declined to be named, said he has bought 9,000sq.m of agricultural land for VNĐ15 billion and expects to pay another VNĐ10 billion for levelling it and completing the paperwork.

“I intend to subdivide this land into 40 lots and sell them at least VNĐ13 million per square meter,” he said.

Planning

Lê Hoàng Châu, chairman of the HCMC Real Estate Association (HoREA), said divvying up lands remains widespread and shows no signs of stopping.

Many of them are not converted into residential lands and lack infrastructure such as roads, schools and hospitals, he said.

Buyers have difficulty obtaining ownership deeds -- or land-use right certificates, as they are called in Việt Nam -- since the existing deed covers the undivided land.

The buyers also have difficulties getting a licence to build housing since most of the lands remain agricultural, Châu said.

Trần Đức Phương, director of Hợp Việt Law Company, blamed the phenomenon on poor management by official agencies, pointing out that it has an adverse effect on urban planning.

The municipal People’s Committee’s Decision No 33 allows households or individuals owning large pieces of land to subdivide them into small lots as long as their use does not change.

Many people take undue advantage of this provision, Phương said.

“Subdividing lands into small residential lots without conforming to the city’s plans means people who live there have a difficult life because of lack of essentials like electricity, schools, hospitals and even markets.”

Châu agreed with Phương but blamed it on slow social housing development.

The city has a serious shortage of low-cost houses while there is a great need for housing, meaning many people are ready to accept the risk of buying land without title deeds and the inconvenience of living without any infrastructure, he said.

“This trend has seriously affected the city’s planning.”

Võ Văn Hoan of the city People’s Committee said Decision 33 was intentionally misunderstood by many local authorities who allowed land owners to subdivide their lands.

“This violates the law. All violations are now being investigated and violators will be punished.”  – VNS