Warning against taking advantage of land auctions for speculation and price hikes
In recent days, public attention has been focused on the auction of 19 plots of land in Long Khuc area (Tien Yen commune, Hoai Duc district, Hanoi). The winning bid price was recorded as a "record" compared to the previous prices of some suburban districts of Hanoi, up to 133.3 million VND/m2. Many "land brokers" have advertised to sell plots of land expected to be successfully auctioned with a difference of 200 million VND or more.
Speaking to Lao Dong, Mr. Dinh Minh Tuan - a real estate expert - commented: "With the winning auction price being 2 to 3 times higher than the average, people who own land in the surrounding area have the mentality of pushing up the selling price of their land. The sudden high land price can also create a trend of land speculation, when many people rush to buy land in the hope of making a profit from the continued increase in land prices. However, this can cause a situation where money flows into land, instead of being circulated in other economic activities."
To ensure compliance with the law, publicity and transparency, Prime Minister Pham Minh Chinh has requested to rectify land auctions. The dispatch clearly stated that there were a number of cases where the winning price was many times higher than the starting price, including unusually high cases. Therefore, the Prime Minister assigned the Chairmen of the People's Committees of provinces and cities to direct competent agencies to review the organization of land use rights auctions in the area.
Ensuring healthy real estate market development
While waiting for the authorities to investigate and make a final conclusion, Lac Viet Joint Stock Auction Company has announced the suspension of two auctions of 52 land lots. Experts say that controlling land speculation is an urgent task. Controlling and handling speculation and price inflation right from the beginning will help the real estate market develop healthily and sustainably.
Sharing with Lao Dong reporter, lawyer Truong Anh Tu - Chairman of TAT Law Firm (Hanoi Bar Association) commented that land speculation is becoming a burning issue, pushing up real estate prices and making it difficult for young people and people with average income to access housing. To prevent this situation, lawyer Tu proposed a number of solutions to curb speculation and stabilize the real estate market.
"One effective measure is to impose high taxes on land purchases without real use. When a person or organization buys land and does not build within a certain period of time, they will be subject to higher taxes. This not only puts economic pressure on speculators but also encourages more efficient use of land.
The application of regulations on mandatory construction time limits on auctioned land is another solution to combat speculation. If the auction winner fails to construct within the prescribed time, the land ownership can be revoked. This ensures that land is not hoarded wastefully and promotes urban development."
According to lawyer Truong Anh Tu, limiting the time for transferring land after purchase is also an important measure.
In addition, the Government can adjust credit policies by tightening real estate loan conditions for investors who do not have a real need to use land. This will not only reduce the amount of speculative capital flowing into the real estate market but also protect home buyers with real housing needs. Providing many social housing projects and low-cost housing will help balance supply and demand in the market. When there are many housing options suitable for the budget of middle-income earners, the pressure on land prices will be reduced, making real estate prices more reasonable.
Finally, reforming the Law on Real Estate Business to allow the subdivision and sale of land plots in some specific cases could also be a solution to increase land supply in the market, helping to cool down land prices," said Mr. Tu.
