In a recent news report, the Vietnam Association of Realtors (VARS) stated that in recent times, many land auctions have become tools for some groups of speculators to manipulate and make profits instead of promoting the goal of fair and effective land allocation. Many participating investors do not have the purpose of using it for practical purposes but only to push up prices, abandon virtual prices or collude to reduce prices, creating a gap to benefit.
Some cases also push prices up very high to create a virtual price level for other projects, but then abandon the deposit, causing land to be abandoned, causing budget loss and market disruption. This is a clear demonstration of taking advantage of legal loopholes and lacking strong enough sanctions in current land auction management.
As a result, a large number of people participated in the auction, but the proportion of participants with real needs was low. Land prices were pushed up unreasonably, many auctioned land plots were then abandoned, distorting the market for profit and causing loss of State budget revenue. This is partly due to the loose regulations and lack of deterrent handling measures.
To overcome this situation, the Vietnam Institute for Real Estate Market Research and Evaluation (VARS IRE) believes that it is necessary to synchronously implement many groups of solutions.
Accordingly, it is necessary to carefully screen the auction participants to eliminate cases of speculation, lack of capacity or no real need to use land. The regulation of starting prices needs to be determined closely with market prices, avoiding creating opportunities for profit groups. In addition, the deposit rate should be adjusted at a reasonable level, about 20-30% of the land value, both ensuring constraint and encouraging healthy competition. In the application, participants must prove their financial capacity, payment ability and purpose of use clearly; for businesses, there must be a commitment from the bank to guarantee and a plan to put the land into exploitation and correct use on schedule after winning the auction.
It is necessary to strengthen sanctions for violations to create real deterrence. According to VARS IRE, cases of intentional manipulation, deposit cancellation or collusion to disrupt the auction must be strictly handled. The penalty level needs to be classified according to the level of violation, and the auction can be banned for a period of 2 to 10 years, or even permanently for acts with the intention of disrupting the market.
In addition to confiscating the deposit, it is necessary to apply additional administrative sanctions and force violators to bear all costs for organizing the auction. In case of detecting signs of manipulation or systematic profiteering, it is necessary to transfer it to the competent authority for consideration and criminal prosecution. At the same time, there should be specific regulations on types of exploitation and manipulation to recognize before going through criminal proceedings. In addition, it is necessary to clearly stipulate the time limit for land use and the minimum time not to transfer, to avoid secondary speculation.
In addition, it is necessary to perfect related regulations and manage data in a synchronous and transparent manner. VARS IRE proposes connecting the electronic identification data system (VNeID) to control auction participants, avoiding the use of "virtual people" or authorizing the roundabout. Along with that, it is necessary to improve tax and credit policies associated with land use rights auctions to control speculative capital flows. The construction of a unified database on land use rights and real estate transactions nationwide is also an important step to ensure the ability to trace, track and transparently manage the transfer and sale process after auction.
VARS IRE emphasizes that land use rights auctions are an important tool to help the State mobilize resources and ensure fairness in land allocation. However, if not strictly managed, this mechanism can be transformed into a speculative tool, causing market instability and damaging public interests. Therefore, perfecting the legal corridor, establishing a strict monitoring and sanctions mechanism is an urgent requirement to build a transparent, sustainable and effective land market, serving the stable development of the economy.
