MINISTRY OF NATURAL RESOURCES AND ENVIRONMENT
HANOI UNIVERSITY OF NATURAL RESOURCES AND ENVIRONMENT
FACULTY OF LAND ADMINISTRATION

STUDENT’S SCIENTIFIC RESEARCH 2016 - 2017

LAND VALUATION – LAND PRICE
DETERMINTION IN CUA DAI WARD,
HOI AN CITY, QUANG NAM PROVINCE
USING GIS-BASED MULTI-CRITERIA
ANALYSIS APPROACH

Scientific speciality: Land Administration

HANOI – 05/2017


MINISTRY OF NATURAL RESOURCES AND ENVIRONMENT
HANOI UNIVERSITY OF NATURAL RESOURCES AND ENVIRONMENT
FACULTY OF LAND ADMINISTRATION

STUDENT’S SCIENTIFIC RESEARCH 2016 - 2017

LAND VALUATION – LAND PRICE
DETERMINATION IN CUA DAI WARD,
HOI AN CITY, QUANG NAM PROVINCE
USING GIS-BASED MULTI-CRITERIA
ANALYSIS APPROACH
Student:
Ẹhnicity:
Class:

DAO Ngoc Ninh
Gender: Female
Kinh/Vietnamese
DH3QN, Faculty of Land administration
Department of House and Land administration
Senior year/4-year academic

Supervisors: Assoc. Prof. Dr. NGUYEN An Thinh
Dr. PHAM Anh Tuan

HANOI, 05/2017


TABLE OF CONTENTS

REFERENCES


LIST OF ABBREVIATIONS
No.

Abbreviation

Stand for

1

AHP


Analytical Hierarchy Process

2

GIS

Geographic Information System

3

K_D

Coefficient of deep indicators

4

MCA

Multi-Criteria Analysis


LIST OF TABLES

LIST OF FIGURES


INTRODUCTION
1. The importance of research
Land valuation and land price determination have been and currently being a
topical issue in many countries around the world nowadays. Its benefits expertise to

the functions of land-use planning and the recording of land tenure cover the areas of
insurance, compensation, property tax, compulsory purchase and strategic advice to
governments (David Peter Mitchell et al, 2015). Land valuation is not only used for
state management of land but also toward sustainable development and becoming one
of the foundations of land administration (Dale, P.F., McLaughlin, J.D., 1988). Each
country has its own way to determine land price and applies several land price
determination methods, so that land price changes from places to places (Cristina
M.B., 1998). The differences in land price, especially the difference between the land
state price and land market price, will make a big impact on economic – social issues.
The land price approached by the government based on the land's ability to make a
profit, the bank interest rate and the supply-demand relationship, which is issued by
People's Committees of provinces and cities as a detailed price list, is no longer
reasonable for land use situation and unable to meet the changes ongoing in the areas.
In the developing countries, including Vietnam, the co-existance of two types of
land price is also a major problem in land management and land use situation (Lin
Gan, Chang-chun Feng, 2015). These changes are happened stronger in narrow coastal
plains (David Peter Mitchell et al., 2015), especially in Quang Nam coastal area as
Cua Dai ward, Hoi An city. Quang Nam province, where as one of five key economic
region of central, is gradually implementing urbanization – modernization. According
to the criteria developed lettered urbanization Quang Nam province, Urbanization Rate
in 2020 will be around 32.3%, and it’s going to reach about 60% in 2030 (decree no.
1367/QD-UBND, dated 17 April 2015 by the People’s Committee of Quang Nam
province, regulation on approving the Quang Nam urban development program for the
period to 2020 and with the vision to 2030). The land price, of course, must be
determined to meet the changes ongoing in the province. Besides, the land state price
is always around from 10 to 70% lower than the market price (Department of Natural
Resource and Environment (DNRE), Ho Chi Minh City). This greatly affect land
management activities and also make it difficult to specify cost–benefit decisions
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during site clearance preparation. Thus, minimize the difference between land market
price and land price approached by government is an important and urgent activity.
This is also the first step to ensure a fair land taxation system (David Peter Mitchell et
al., 2015).
The development of Geographic Information System (GIS) currently provides
several tools that could show land prices on space, serve improve efficiency of State
management on land. Application of GIS also allows for combining quantitative
analysis calculations (such as multi criteria analysis, multivariate analysis,...) in
defining and classifying the level of influence of the socio-economic factors affecting
land price. The basis of valuation is extended, more closely and land prices to be
calculated more accurately.
Due to the actual needs and the importance of land valuation and land price
determination in land management, the research: “Land Valuation and Land Price
Determination in Cua Dai Ward, Hoi An City, Quang Nam Province using GISBased Multi Criteria analysis approach” was choosen and implemented.
2. Objectives - Missions
2.1. Objectives
Determine land price and create a region map of land value (at state prices and
market prices) based on GIS and Multi Criteria Analysis application in Cua Dai ward,
Hoi An city, Quang Nam province.
2.2. Missions
To achieve this goal, the following the research’s missions is conducted.
- An overview document on the legal regulations, the science theories, methods
and technologies, practical applications related to land valuation, establishing region
map of land value in the world and in Vietnam.
- Doing research in transfer data and create a map of land value under state
price.
- Studying to apply AHP and GIS, interpolate data to determine land price and
to establish region map of land value at market prices.
- Establishing the region map of land value at market price at Cua Dai ward

based on GIS application.
- Comparison between land state price and land market price.
3. Research limits:
- Space limits: The study is conducted in Cua Dai ward, Hoi An city, Quang Nam
province.
- Scientific limits:
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+ The map of the land value in Cua Dai ward under state and market price is
updated in 2017.
+ Applying ArcGIS to create a map of landing value.
+ Application combines GIS and AHP model for land valuation and establishing
the region map of market price.
4. Meaning Of Practical Science
+ Science meaning: The topic of systematizing the scientific basis of land
valuation, valuation methods is using multi-target analysis method and applying GIS
to establish region maps of land value.
+ Practical meaning: The research result is scientific basis for using land and
financial management of land and land prices (such as being the basis for serving the
sale, exchange and transfer of land use rights, contributing to stabilize the land market;
being the basis for land compensation when the State recovers land; being the basis for
the use of land in order to improve the efficiency of land management and use;…)
The research also proposed a methodology to apply technologies to investigate,
collect, create and manage data supporting in order that the work of land management
the state is more efficient.
5. Structure
Apart from the introduction, conclusions and recommendations, the project
consists of three chapters as the following:
Chapter 1: Literature Review about Land Valuation – Land Price Determination

and Establishing Region Map of Land Value.
Chapter 2: Establishing Region Maps of Land Value based on Geographic
Information System and Multi Criteria Analysis.
Chapter 3. Land Valuation – Land Price Determination and Establishing Region
Maps of Land Value at Cua Dai Ward, Hoi An City, Quang Nam Province, Vietnam.

8


CHAPTER 1: LITERATURE REVIEW
ABOUT LAND VALUATION – LAND PRICE DETERMINATION
AND ESTABLISHING REGION MAP OF LAND VALUE
1.1. Overview of land price and Theoretical basis of land price
1.1.1. Overview of land price
In the world, land price and land valuation are always a concerned issue. Land
price is an essential part in state management of land, is established for the
compensation,

clearance land use tax calculation (Mitchell et al., 2015). Land

valuation is not only used for state management of land but also toward sustainable
development and becoming one of the foundations of land administration. Different
country has different way to value land, that’s why the price of the lands varies from
one area to another (Cristina, 1998). The difference between land prices at state and
market price impact a lot on the social economy of the area. If the difference is large,
the land market will face with many obstacles, the state will have difficulty in
managing land.
Estimating land value between countries around the world and Vietnam has
similarities, besides, still has differences in the characteristics of each country. In
general, the valuation system in each country is stable from central to local with

function, clear mechanisms of action, with own land management regime.
In Vietnam, land belongs to people. The Government allocates land to
organization, household and individual for stable and long-term use in planning and
zoning. The Government authorizes land to users through renting, recognizes land
using right to stable user, regulates rights and obligations to users. Otherwise, land
price is the expression by money of land right value defined in rule 23 Article 4 in
2013 Land laws: “using land right price (or Land price) is money in a unit each area
regulated by the Govern or establish in land-owning right negotiation” (Nguyen Duc
Kha, 2007). In principle, land prices formed depends on the profitability and its
method of land use. However, land is natural resources (not human working), is the
input material for every commercial activities and consuming demands. In the market
economy, land prices are a component of real estate market and always fluctuate in
both quantity and expression. The state needs to intervene to adjust prices in favor of
9


sustainable development by means of legislative, zoning and planning. So land
valuation is establishment and essential component in making a reasonable land
management. Land valuation facilitates fairness in the performance of financial
obligations related to land between managers and land users, between land users. In
addition, land valuation is also an estimation of the value of land use rights in
monetary form for a defined purpose, at a defined time. To estimate the land prices, it
must be based on principles and methods of valuation on the basis of firmly grasp the
land market data, based on the economic and natural attributes of the land parcels (Tra
Ho and Quan Nguyen, 2006).
1.1.2. Theoretical basis of land price
In Vietnam, Land Price means the value of land use rights calculated per unit of
land area (Section 19, Article 3, The Land Law 2013) and Value of land use rights
means the monetary value of a land use rights over a specific area during a
specified defined use term (Section 20, Article 3, The Land Law 2013)

Land is a non-labor product, and It does not have itself value. Therefore, for the
land, its price reflects the effect of itself in economic activities, it is the profitability, in
other words, land price high or low is determined by high or low earning potential at
specified time. Land benefit is go along with its profitability from the land price and
the corresponding price such as ownership price, land tenure price, the price of land
rental rights, the price of land mortgage rights and so on (Vo Dieu Linh, 2015).
1.1.3. The main characteristics of land price
Since land is inherently peculiar unlike other commodities, land prices have
different characteristics. Features of land prices include:
- Differences in means of expression: Different goods are usually denoted by
the price, but the land value is also denoted by the tax beside by the price. Land price
reflects the function of the land in the economic activities. The more land's benefit
owners have, the greater profit they achieve. Land also have the respective price such
as: ownership price, land tenure price, the price of land rental rights, the price of land
mortgage rights and so on.
- Differences in price basis: Commodities have mobility. The origin of price is
itself value. Land is not mobile, it can’t move itself but its benefits and profits.
- Differences in formation time: Normal goods can be standardized, easily
compare and also have almost completely market, its form is easy to complete in a
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short time. Lands have large differences in each individual, is lacks of a complete
market, its prices are formed in the long-term under the influence from the past to the
future; the formation time of is long, difficult to compare each other.
- Land prices are not indicative of monetary value of land: High or low prices
are not determined by the cost of production. Reflected land prices are the value of
natural resources and property, the direct cause of land prices is the degree of
manipulation of land use rights or land tenure rights. Land is not the product of human
labor, therefore, there is no production cost. There are varies costs which are difficult

to allocate for accounting of land price (for example the costs for building social
infrastructure (schools, hospitals, markets, ...) which are contributed to a better life and
caused land prices higher but caused more dificult for accounting of land price).
- The price of land is mainly due to the demand for land: In the normal market,
commodity prices are influenced by supply and demand. Land prices are determined
primarily by the demand for land and tend to increase clearly, land price growth was
much higher than the ordinary goods price growth. There are two main reasons: firstly,
because of the socio-economic development and the increasing population while the
land area has not been increased, the demand for land increased lead to increased land
prices; secondly, the organic structure of capitalist society is enhanced making the
reduction of average profit margin , thereby making land prices increasing.
- Land prices are regional and distinctly distinct: Because land is fixed in terms
of location, it is difficult to form a unified, unified market between land markets and
market prices clear area.
- Land prices tend to rise sharply: land price increases are higher than normal
commodity prices. Mainly due to two-side causes.
- Different in market structure: Commodities often have a complete market,
price is relatively objective, but land market is not complete, subjective factors affect
have greatly influences on the formation of land prices.
- Difference in depreciation: Goods are the more depreciation, the less value.
However, land is not only depreciating but also increasing in value, therefore
increase in land price often go along with socio-economic development.
1.1.3. Factors affecting land price
Land prices are influenced by a variety of factors. There are some factors which
have directly impact on land prices like natural elements, economic, user mentality
and indirect factors such as macroeconomic policy, climate factors, social security
11


factors, international factors etc.

a, General factors:
It is the common factors which are popular to land price, generate an overall
effect on land prices in standard socio-economic conditions, then become the basis of
setting specified price for different lands.
- Administrative factor: It mostly is the participation of the state in land price,
this presence has a great influence on land prices.
- Demographic factors: It is the most major factor of economy, social. Its
affection on land price related to population density, people essence and family
demographic
- Social factors: There are four main social reasons affecting on land price:
stable political situation, social security level, urban and land speculation.
- International factors: The development and completion of land market can’t be
separated with International situation. The impact of the political and world economy
on land prices is reflected indirectly through the impact on the domestic economic and
political situation.
- Economy: The development of economy situation plays an important part in
international people life and international status of each country.
These common factors are at macro level, influences on whole area. That
influences cause the differences in locals and countries in land price.
b, Regional factors:
It mainly refers mainly on natural condition, socio - economic conditions in
which have local characteristics due to the combination of these factors, create
regulations that affect the price of local property.
+ Location: The location factor affecting land prices is primarily about the
economic status, the specific location of each valued object in the city including: Rated
lands, distance to the city center, commercial center,.. and including the influence level
of centers on other areas of the city or land categories.
+ Traffic conditions: The main factors affecting land prices are the type of local
traffic, convenience and the communication methods with the outside, the combination
of traffic network, road and grade conditions, public transport status and traffic

network density, ..
+ Infrastructure equipment conditions: This consists of two major types:
infrastructure equipment and service equipment. It's underground water system,
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electrical power system, telephone system, school system ... It also take into account
grade level, guarantee coefficient system, level of synchronization,...
+ Environmental quality: It mostly include: human environment and natural
environment. Natural environment is conditions: Geology, terrain, slope, wind
direction, air… Human environment are type of occupations, educational level, and
standard income in that region.
+ Limitations of urban planning: Impact on land prices, mainly used in an area,
use structures, conditions of restriction of land use.
- The influence on the land price of the area correlates directly on zoning
function and different purposes for land use in urban area.
c, Particular factors
It is the featured factor and condition of the land itself. Those factors are also
known as land factor. The influence of individual factors on land prices is affecting the
price of each land parcel of each type.
- The acreage: Land acreage should be medium, too large or too small parcels
would be not easy to use therefore it affects to price.
- The width: The narrow frontage width affects to land use and also affects the
efficiency of display and profit leading to affecting the price.
- The depth: The shallow land parcels compared to street side are often too
difficult to use then affect to lands.
- Shape: The most beautiful land parcels’ shape is in rectangular, curved forms
(such as triangle, trapezoid, parallelogram) are not favorable to use therefore affects to
land price.
- Slope: High slope is difficult to develop or the development price is too high,

so it affects the price of land.
- Condition of land administrative equipment: It is the equipment directly
relating to land such as surface water, underground water, electricity, gas...
- Urban planning: It considered as a particular factor, including the proportion
of soil type, height of the structure.
- Land location: It locates at any specific location in the area, distance to the bus
station, school, park.. The land lot locating the head of the road or the street corner has
a great influence on land prices.
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- Land use duration: This factor determines how long it will be used and how
much it will benefit from the land plot, so it directly affects the land price.
Comment:
Among the factors mentioned above, there are always big impact factors and
small impact factors. And the most major affecting factors to land price are natural
condition, land location then land shape and land area. Besides, there are some other
individual cases which make land prices rise at different rates, but they all determine
the profitability of the land.
1.2. Theoretical basis for land valuation – land price determination
1.2.1. Definition of land valuation – land price determination
Land valuation is a specialization activity that is both economic - technical,
legal, social and artistic. The creation, existence and development of valuating
activity associated with the formation, existence and development of the market. In
the actual economic activity of the land. Land valuation – Land price determination
is based on the principle and method of land valuation through the understanding
market data of the economic and natural attributes of land due to the quality and
profitable situation. In the actual economic activity of the land, it is considered all
impact of socio-economic development factors, land use patterns, expected profits
from land and land policy, then combine to set prices at a time for a parcel of land or

lots of land to a land use rights (Vo Dieu Linh, 2015).
Land is a special asset. Apart from the space, time, economic and legal
aspects, its price is influenced by psychological and social factors. Therefore, land
valuation can only be an estimation of the value, cannot calculate properly or enough
like common assets valuation (Nguyen Kha Duc, 2007).
The estimation of land value is a problem that has been broached in several
studies for several years. All these models has a common goal, that is, they have
always attempted in order to minimize the differences between estimated and real
market values. For instance, a model currently used to estimate urban land values
make use only of weights, which depend on the property’s characteristics. An
international example of this kind of model is the work of Azar et al. (1994) in Beirut.
Another method of land appraisal that is widely used is based on multiple regression
14


models. This method has been successfully used in several countries, for instance:
Phang và Wong (1997) in Singapore; Abelson (1997) in Australia; Raia Jr. et al. (1996)
in Brazil ; Gibb (1994) in Scotland; Aoki et al. (1994) in Japan; Pasha và Butt (1996)
in Pakistan; ... Although the multiple regression technique can provide excellent
estimations, the search to identify the best model requires a knowledgeable and
experienced person. Furthermore, if the analyst ignores the impact factor and problems
arising from an interrupted flow of data, the results can be jeopardized.
1.2.2. Land valuation – land price determination’s methodologies
In Vietnam, on 15 May - 2014, the Government issued Decree No. 44/2014/NDCP on Regulations on land prices. According to Clause 2, Article 5 stated in Decree
No.44/2014/ND-CP, there are 5 methods to be used by the authorities in determining
land price, including: The direct comparison method, which is applied to determine the
land price when comparable plots of land are sold on the market or at auction; The
subtraction method, which is applied to determine the land price of the plot of land
with property thereon when there is sufficient data on the real estate price (including
land and assets) that is similar to the land sold or sold at auction; The income-based

method, which is applied to determine the plot of land of which income and land use
cost are already determined; The surplus-based method, which is applied to determine
the plots of land with development potential as a result of changes of zoning or
purposes of land when the total estimated revenue and expenses can be determined;
The co-efficient method, which is applied in some cases.
a, Direct comparison method
* Definition
Direct comparison method is a land pricing method meant to compare and
determine the price for a particular plot of land by analyzing prices for unoccupied
plots of land with similar purposes, locations, profitability, infrastructure, area,
shape, legitimacy that have been sold on the market or at auction (hereinafter
referred to as comparable plots of land) (Clause 1, Article 4 Decree no, 44/2014/NDCP).
* Application of Direct comparison method

15


The direct comparison method is applied to determine the land price when
comparable plots of land are sold on the market or at auction (Point a, Clause 2,
Article 5 Decree no. 44/2014/ND-CP).
The land price will be determined by the way of using the average of prices in
respect of three to five comparable land parcels or vacant blocks which adjoin or are
situated in an area adjacent to the land in question and which have similar
characteristics to the land in question in terms of land type, location, land area,
infrastructure, legal grounds and use purpose.
* Sequence conducted
Step 1: Surveying and gathering of information;
Step 2: Comparison and analysis of information;
Step 3: Adjust the different price elements;
Step 4: The price for the land in question shall be determined by using the

average of prices for three to five comparable land parcels or vacant blocks which
has been adjusted for the price difference in Step 3.
b. The income-based method
* Definition
The income-based method is a method used to determine land price by
dividing the average annual net income from a land unit by average annual interest
rate of 12-month term deposit on the pricing date at a state-owned commercial bank
of which the deposit interest rate is highest in that province (Clause 3, Article 4
Decree no. 44/2014/ND-CP).
* Application of The income-based method
The income-based method is applied to determine the plot of land of which
income and land use cost are already determined (Point c, Clause 2, Article 5 Decree
no. 44/2014/ND-CP).
The authorities calculate the total annual income derived from the land. With
respect to a vacant block or land on which buildings (housing) have been constructed
for lease, the total annual income derived from the land in question is the rent for the
real estate (comprising the land plus assets on the land) collectable annually. The land
16


rent or the rent of real estate is calculated on the basis of actual prevailing rates and
prices in the local market at the time of calculation. With respect to agricultural land
on which a person allocated with such land himself organises agricultural production,
the total income earned means the total turnover from production activities on the
land collectable annually.
* Sequence conducted
Step 1: Calculation of total annual income derived from the land in question;
Step 2: Calculation of expenses payable for generation of total income;
Step 3: Calculation of annual net income in accordance with the formula set
out;

Step 4: Determining of an estimated land price in accordance with the formula
also set out.
c. Subtraction method
* Definition
The subtraction method is a land pricing method applied to the land with
property attached to land by subtracting value of the property attached to land from
total value of real estate (including land value and value of the property attached to
land) (Clause 2, Article 4 Decree no. 44/2014/ND-CP).
* Application of The subtraction method
The subtraction method is applied to determine the land price of the plot of
land with property thereon when there is sufficient data on the real estate price
(including land and assets) which is similar to the land sold or sold at auction (Point
b, Clause 2, Article 5 Decree no, 44/2014/ND-CP).
* Sequency conducted
Step 1: Gathering of information;
Step 2: On-site survey;
Step 3: Determine a present value for the assets in question in accordance with
the formula set out in Circular 145;
Step 4: Determine the value of the property;
17


Step 5: Determine a price for the land in question.
Under this method, the authorities will gather market information in order to
select at least three properties (comprising the land plus assets on the land) which have
been successfully sold on the market and which have similar characteristics to the land
in question in terms of location, status quo, infrastructure conditions, legal grounds,
use purpose, cost and so forth.
d. The surplus-based method
* Definition

The surplus-based method is a method used to determine the price of the land
with development potential as a result of changes of zoning or purposes by
subtracting estimated total cost from estimated total revenue of the real estate.
(Clause 4, Article 4 Decree no. 44/2014/ND-CP).
* Application of the surplus-based method
The surplus-based method is applied to determine the plots of land with
development potential as a result of changes of zoning or purposes of land when the
total estimated revenue and expenses can be determined (Point d, Clause 2, Article 5
Decree no. 44/2014/ND-CP).
* Sequency conducted
Step 1: Determine the optimal use purpose and effectiveness of the land in
question on the specified base;
Step 2: Estimate the total developed value of the property;
Step 3: Estimate the total costs of developing the property;
Step 4: Determine an estimated land value.
The authorities determine the optimal use and purpose for the land, based on
characteristics, advantages and plans for the land. The total developed value of the
property includes the total value of housing, of sub-divided plots, etc. which it is
proposed to sell after completion of the investment project.
e. The co-efficient method
* Definition

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The method using land price coefficient (hereinafter referred to as the
coefficient method) is the method used to determine land price by multiplying the
land price coefficient by the land price in the land price lists promulgated by the
People's Committees of provinces and centrally run cities (hereinafter referred to as
provinces) (Clause 5, Article 4 Decree no. 44/2014/ND-CP).

* Application of the co-efficient method
The specific land price determined by the coefficient method is applied to
(Point d, Clause 2, Article 5 Decree no. 44/2014/ND-CP and Clause 2 Article 18
decree no. 44/2014/ND-CP):
- The cases in which the plot of land is worth below VND 30 billion (applied
to land in centrally-run cities), below VND 10 billion (applied to land in highlands),
or below VND 20 billion (applied to other provinces); the cases in which annual rent
for leased land is adjusted; reserve price at land auction when the government leases
out land and collect land rent annually.
- Cases with regard to the adjacent plots of land having the same purpose and
profitability from the such purpose.
Although 5 traditional methods can provide excellent estimations, the search
to identify the best model requires a knowledgeable and experienced person.
Furthermore, if the analyst ignores the impact factor and problems arising from an
interrupted flow of data, the results can be jeopardized.
1.3. Introduction of region map of land value
Region of land value is a set of land parcels that is influenced the same by
natural, socio-economic, environmental factors and has the similar the value of use.
Region map of land value indicates values itself; this includes factors affecting
the price of a land parcel at a given time. This map shows value ranges in currency.
Region map of land value shows the visual value of land parcels, and it not only
provides managers with an overview of the price of land in the area, but also helps
people know the value of their land plots. On the other hand, the land value map also
shows the relationship between the location of a land parcel and its value.
There are two types of Region maps of land value:
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• Region map of land market price:
The basis for creating region map at market prices is based on actual land price

data collected on the market through information sources such as completed land
transactions in the market, documents from the land administration, the internet or real
estate trading floors… in study area.
Purpose of establishing region map of land value at market price is expressing
publicity and transparency of land price in the area to help people to quickly know the
price of land then make right investment decision, contribute to the development of the
real estate market in the region.
• Region map of land state price:
The basis of creating this map is the decision of the City People's Committee to
announce annual price in the area of that province or city. Each locality has its own
specific regulations depending on the development situation and characteristics of the
natural, economic, cultural and social factors of that locality.
- Principles for determining land prices according to state prices in Cua Dai
Ward are based on profitability, distance to main roads, city center and convenient
infrastructure conditions to live, do business and provide services. The location of land
parcels is determined by the principle: location 1 is near the road named in the price
list, positions 2, 3, 4 in order of profitability and less favorable infrastructure
conditions.
1.4. Literature reviews on scientific research on land valuation – land price
determination in the world and in Vietnam.
1.4.1. In the world
• In China:
Yu Quin et al. (2016) did a research on the price changes of every Chinese
urban land parcels from 2007 to 2012. The average of land prices in 2012 was higher
than 2017, reached 57%, 24% and 41% correspond to civil, commercial and
industrial land categories. However, the price gaps were not the same in the
distribution of prices for each land type. The land price differences allocated between
2007 and 2012 were determined by the different land properties and impact factors
resulting from the gradient change on the basic functions of land prices. Research
20



result shows that the distribution of efficiencies and effective offset to raw the
material price variance varies with price distribution sharing and also varies by land
type.
Shoungeng HU et al. (2016) did a research on spatial model of relationship
between land prices and affected elements in Vu Han city, China. Land prices played
an important role in guiding allocation of land resources and development of urban
planning, especial in big city in developing countries and population changes
frequently. Therefore, spatial information in the spatial model of the relationship
between land prices and related factors is very important. This study used data about
land prices in 10 years. Based on 12 elements from 3 fields (attributes of land,
location factors and areas), a system of valuating land prices was established. The
spatial distribution of the estimated coefficients and values of the three main
variables (floor area ratio, distance to the CBD and distance to the nearest lake)
collected by the GWR indicated that this relationship reflected factors affecting land
prices. The positive impact of the floor area ratio on land prices is more important in
higher development areas in less developed regions. In contrast, the negative effects
of distances to the central area have the highest land prices. Moreover, wealthy
residents may be willing to pay a higher price for the best view of the lake, but
infrastructure constraints have a negative impact. This research results provide
detailed information between land prices and effecting factors in local area,
promising for urban planners to evaluate the science of land prices and implement
specific regional strategies.
Haizhen Wen et al. (2013) conducted a research on the relationship between
urban and residential land prices in 21 provinces in China. The basic economic
principles was recognized as decisive factor for housing and land prices on the
city level, but the relationship between housing prices and land prices has been
disputed. In this article, a simultaneous model, the equation was developed to
explore the interaction between housing prices and land prices. This model uses

urban land prices and housing as endogenous variable and 5 factors for land prices
and 7 factors for housing prices as exogenous variables. By using sample data of 21
provinces in China 2000 - 2005, this model was estimate using the smallest twosquared method. Housing prices and land prices have an endogenous correlation, and
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as a whole, housing prices have a greater impact on land prices. One-time income is
not only an important factor for land prices but also has a direct impact on housing
prices. Falling house prices have the highest level of impact on housing prices,
which implies that house price increases are effectively projected housing prices.
This model is effective and reasonable, it can provide a basis for related government
agencies to establish related policies.
• In the United States
Nichols et al. (2013) conducted a research on population and trade price
surveys in the United States. The authors use a large set of land sales dating from the
mid-1990s to construct land price indices for 23 market sectors in the United States.
Price indexes show a significant increase in both commercial and residential land
prices in years before developing in 2006-2007. The indexes of a land and
structures, these compares indicate land prices have more fluctuate than structural
prices in this period. This results is an important factor of the hypothesis, housing
prices and real estate prices will be volatile.
• In Euro
Demetriou (2016) conducted a land valuation study in the Mediterranean land
consolidation project. There are 2 main methods used to quantify the land value of a
parcel of land in a plot exchange scheme. The first involved assigning an agronomic
value based on soil quality and land productivity represented by a number of points
while the second determined market prices about money. In the Mediterranean area,
market prices was used, determined via an empirical process is based on visual
inspection of all land parcels and therefore it is a type of bulk land evaluation. This
process presents weaknesses in time, cost, transparency, accuracy, reliability,

consistency and equity. Besides, appropriate sales transactions in rural areas
complicated the whole process. Therefore, these deficiencies had had a negative
impact on the preparation of land consolidation plans and had resulted in disputes
between landowners and regulators implementing each program. The professors
awared about this problem, but rarely research on valuating land prices and the
quality of this traditional process. The results of this study indicated the issue of land
valuation and appraisal by the Land Valuation Committee (LVC) in a case study in
the Mediterranean landfill and proposed a new framework to implement this process.
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Current processes are evaluated using advanced spatial analysis techniques,
including multiple regression analysis (MRA) and geographic weighting regression
(GWR) in the system geographical basis (GIS). The results showed that 8/14
valuating land prices factor related to land parcels characteristics are location, legal
factors, physical attributes and economic conditions that are most important. In
addition, the change was fundamentally good, some of the assumptions needed to
test hypotheses are not met, showing unreliability and inconsistencies in model
relationships. Further, the presence of spatial correlations indicated significant
regional change in the factors that indicated significant contradiction in the pricing
policy applied by the LVCs. The following two findings confirmed the concerns of
experts and suggest a new land price framework designed to overcome the problems
of the current process.
Deac (2014) conducted a study on challenges and difficulties in valuating land
prices in Romania. The main purpose of this article was to describe methods of land
valuation – land price determination, challenges and constraints applied in Romania.
Furthermore, starting with the idea that it is the biggest obstacle to the
implementation of land valuation comparison methods in Romania lack of the
general database relates to information on real estate transactions similarly and
recently (necessary for determining land prices) and the allowance to access this

information, as a result. This need also outlined a number of orientations for effective
solutions to address these challenges. 
1.4.2. In Vietnam
In Vietnam, determining land prices and establishing region map of land
prices was researched in some recent projects as following:
Nguyen Phi Son (2014) studied the application of statistical models and GIS
technology in the construction of non-agricultural land value areas for urban areas. In
particular, land prices are considered as an economic category, applied in planning
problems, regional potential assessments, economic forecasts. The research
mentioned about theory, approach, provided views that shedded light on the concept
of land value contributed to address the fundamental relationships in real estate
valuation, laying the foundations for each land parcel’s price determination,… The
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research results include automatic building the map of valuating land prices, nonagricultural land in urban area by statistical models and GIS technology.
Trinh Huu Lien et al. (2015) applied GIS technology in building a current
land-use database from digital cadastral map that serves for land management. The
foundation of modern land management was creating records of land use rights,
statistics, current land-use and planning by modern technologies in system. The
article focused on resolving the differences of statistics from land-use situation
database and data from from generalized current land-use map. Based on the analysis
of the reason of the differences between statistic sets from land-use situation and
current land-use map, the authors proposed to create a current land use situation
database for land management.
Nguyen Quoc Khanh et al. (2015) built a technology progress to create set of
current natural resources maps based on Remote Sensing application and GIS. The
article explained the technology progress to create set of current natural resources
maps in province level based on Remote Sensing application and GIS. This progress
was applied in practice and obtained certain effect.

There are several scientific projects have introduces about GIS technology
supporting land management: Establish a database to serve the collection of land use
levy in some wards of Bac Ninh city, Bac Ninh province, Application information
technology in accessing and predicting the erosion situation in Hoa Binh province,
Application GIS in establishing database supporting for land management in Dai
Dong commune, Van Lam district, Hung Yen province, Application GIS technology
supporting the standardization of spatial data of land in Hai Phong city, Develop a
database service of land evaluation and land use planning at Phu Son commune,
Huong Thuy district, Thua Thien Hue province, Application GIS to build a database
of land prices by location serves the real estate market in Hoa Cuong Bac Ward, Hai
Chau district, Da Nang city.
1.4.3. General reviews of the scientific researches
From the research results of land price, land valuation – land price
determination and GIS application, there are some general reviews of these studies in
the world and in Vietnam:
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- These studies mainly focused on land price and land valuation – land price
determination. The research orientation mainly concentrated on issues: changes on
urban land price, the relationship between land prices and factors affecting land
prices, the relationship between urban land prices and housing, land valuation – land
price determination in land consolidation project, difficulties and challenges in land
management.
- In addition to research on land prices and land valuation, these studies also
applied GIS technology techniques for land management of the state scientifically.
These researches applied GIS technology techniques to build non-agricultural land
value area in urban or applied GIS technology to build a land-use situation database
from digital cadastral map for land management of the state and build technology
progress of creating current map of natural resources based on Remote Sensing

application and GIS.
- Among database and research methods mostly used by these studies such as
land valuation method, comparative land method, land price; and among land
valuation affecting factor, the most important factor was location factor, legal factor,
geographical attributes and economic conditions. Besides, it also applied assessing
the potential region and economic forecast methods for determining land price as
region level.
- The results of these projects reflected that different regions had different
prices, provided detail information about the relationship between land prices and
land prices affecting factors and support the government setting policies related to
land price. In addition there were some works that could be applied in practice and
give out certain effects.

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