According to the Vietnam Real Estate Brokers Association, in recent days, land auctions in suburban districts of Hanoi such as Thanh Oai and Hoai Duc are receiving people's attention due to the large number of registration applications. , the winning auction price skyrocketed, dozens of times higher than the starting price.
VARS believes that the developments and results of these land auctions are both unusual and normal. Because nowadays, the boundary between normal and abnormal things seems to be indeterminate.
Explaining the reason, VARS said that the price increased dozens of times, this caused debate because of the anomaly, in fact it was due to the low starting price of auctioned land.
Previously, regulations for determining land prices allowed hiring consultants. Land auctioned at the auction on August 10 in Thanh Oai district was also hired as a consultant, the consultant determined the starting price from 40-45 million VND/m2.
However, Decree 12 (Decree amending and supplementing a number of articles of Decree 44 guiding the implementation of the 2013 Land Law), currently Decree 71 (Decree regulating land prices, issued by the Government on April 27 .2024) has removed the regulation on leasing consultants, switching to being determined by the K coefficient multiplied by the city's land price list.
Meanwhile, according to Decision 46 dated July 18, 2024 of the Hanoi People's Committee, the land price adjustment coefficient of Thanh Oai district is 2.35. The currently valid land price list issued in 2020 ranges from 3.6 to 5.3 million VND/m2. Therefore, when multiplying these two coefficients together, the price is only from 8.6 to 12.5 million VND/m2.
Safe products with low starting prices and low deposits (from 100 - 200 million VND), creating great appeal to buyers. Therefore, it is not difficult to understand that this auction attracted thousands of registration applications.
However, the land price in a location with unremarkable infrastructure and utilities, in a suburban locality, has the potential to increase at a normal level, up to more than 100 million VND/m2, on par with Land prices in urban areas and densely populated areas are abnormal, far exceeding the actual value. As a result of unhealthy intentions.
Many investors participating in these auctions are people who have a "career" in land auctions. They often participate for the "simple" purpose of "surfing", not caring what the real value is. Just win and then buy and sell immediately to make a profit or be ready to give up your deposit if the market does not respond.
Or the more "dangerous" purpose is to create land "fever". These individuals take advantage of auction deposits to inflate the prices of related land areas. The consequences of these situations are real estate prices ( Real estate), which was already high, is now increasing, making the dream of housing increasingly distant for people, especially young people.
The Vietnam Real Estate Brokers Association commented that the State needs to soon have more mechanisms to control speculative activities. By imposing taxes, targeting those who accumulate and speculate instead of those who buy real estate for living purposes or to organize production and business, the accumulated assets factor will be reduced.
The tax rate may gradually increase for real estate transactions that the seller has a short holding period or if the real estate owner does not put the real estate into business activities or does not carry out construction after receiving the land.
Taxing real estate in the right direction will make people have limited or no more incentive to speculate because, along with interest costs and other opportunity costs, owning speculative real estate becomes riskier. Buying and reselling real estate to gain profit, or creating virtual supply and demand to inflate real estate prices gradually becomes meaningless.
