PV Lao Dong discussed with real estate experts and lawyers to give readers a comprehensive perspective.
Question about the starting price process
One of the notable points in this auction is that the starting price for land lots is only 7.3 million VND/m2.
Talking to Lao Dong reporter, Lawyer Truong Anh Tu - Chairman of TAT Law Firm (Hanoi Bar Association) said that the starting price is determined based on the land price list and the adjustment coefficient (K) according to Decision 30/2019 of the city.
Land price lists, which are often lower than actual market prices, have resulted in starting prices lower than the actual value of land plots. This shows that there is a large difference between the starting price and the market value, leading to the winning price being nearly 18 times higher than the starting price.
The winning price was unexpectedly high, with some lots reaching more than 130 million VND/m2, reflecting fierce competition and expectations about future real estate value. However, this large difference also raises questions about the reasonableness and fairness of the starting valuation process.
Long auctions "affect transparency"?
Also according to Mr. Tu, the auction lasting until dawn is an unusual phenomenon in public asset auctions. Prolonging the auction can affect transparency and fairness, as participants may be affected mentally, health and decision-making ability.
This prolongation can lead to unwise decisions that do not reflect the true will of the participants. This may also violate regulations on auction timing, raising questions about the transparency of the process.
"This auction raises many important legal issues. Determining a low starting price compared to market value can cause damage to the state budget and create injustice for other investors. There should be a mechanism to update the land price list to be close to the market price or apply other valuation methods when auctioning valuable assets such as land.
In addition, the auction organization process needs to be considered to ensure fairness and transparency. Extending the auction should not affect the rights of participants and should comply with time regulations.
Additionally, large discrepancies can be a sign of irregularities in the auction process, including possible collusion among investors or other non-transparent practices. There needs to be monitoring and investigation measures to ensure a fair auction process," Mr. Tu said.
The winning bid price is too high, leading to consequences
Sharing with Lao Dong reporter, Mr. Dinh Minh Tuan - Southern Regional Director of Batdongsan.com.vn said that the results of land auctions with high prices will make site clearance costs for new projects become more expensive. more expensive.
"With the winning auction price 2 to 3 times higher than the average price, people who own land in the surrounding area have the mentality of pushing up the selling price of their land.
Sudden high land prices can also create a trend of land speculation, as many people rush to buy land in the hope of profiting from continued increases in land prices. However, this can cause cash flow to stagnate in land, instead of being circulated in other economic activities" - Mr. Tuan said.
According to Dr. Tran Xuan Luong, Deputy Director of the Vietnam Real Estate Market Research and Evaluation Institute, there is a "fever" of land auctions in suburban districts such as Thanh Oai, Hoai Duc... with much higher winning prices. Compared to the market, it is partly manipulated and "inflated" by speculative groups.
Through monitoring recent auctions, a group of investors from Hai Duong, Bac Ninh, Bac Giang... appeared to participate in the auction and pay high prices. This problem has the potential to push up housing and real estate prices in the near future, making it difficult for people with real needs to access them.
"To prevent speculation and "inflated prices", it is possible to study increasing the deposit to 50% of the original value, after winning the auction 1-2 years before notarization, transfer, purchase and sale are allowed. Or if transferred within the above period, high taxes will be charged..." - Dr. Tran Xuan Luong shared with the press.
