The price of more than 100 million VND/m2 is the highest winning price in the auction of 68 land lots in Thanh Cao commune, Hanoi in mid-August 2024. Notably, the auctioned land is about 40km from the center of Hanoi and the infrastructure has not changed much over the years.
According to the reporter's research, land in the villages in this area currently only fluctuates from 30-40 million VND/m2. The locations on large, beautiful and convenient roads are priced at 70-80 million VND/m2. Clearly, there is a big difference with the auctioned land price.
The development did not cause much surprise when the deadline for paying for the auction of the 68 plots of land above expired, only 13 plots had paid in full.
According to the representative of the Thanh Oai District Land Fund Development Center (Hanoi), among the lots that have paid in full, the highest lot has a price of more than 55 million VND/m2. The remaining 55 lots, including the person who won the lot with the highest price of nearly 100.5 million VND/m2, did not pay. Thus, the 55 lots that have not paid in full are understood to have forfeited their deposit.
Some experts say that the situation of pushing up the winning price at real estate auctions has been repeated many times. Many speculator groups participating in the auctions mainly pay high prices to create a new price level and then sell the goods to make a profit. If the land plots cannot be transferred soon, the deposit will be canceled.
After unusual signs at some land auctions in Thanh Oai and Hoai Duc districts in Hanoi, the Ministry of Natural Resources and Environment established an inspection team, coordinated with the Hanoi People's Committee to review, consider, and evaluate those auctions and implement them in accordance with the Prime Minister's direction.
Deputy Minister of Natural Resources and Environment Le Minh Ngan said that winning an auction with a price many times higher than the starting price and then forfeiting the deposit is an issue that requires a review of the entire process.
Through actual inspections in localities, the agency will propose amendments or supplements to legal documents to regulate and ensure market transparency and stability.
Assessing the situation of deposit abandonment after winning a land auction, Lawyer Nguyen Huy An (Hanoi Bar Association) said that in reality, there have been many cases of land lots winning at unusually high prices and then quickly abandoning the deposit.
"The reason is that the participants are mainly professional investors, participating in many different auctions, while the number of locals is very small," said lawyer An.
Lawyer An also said that the consequences of losing a deposit to win a land auction will have a big impact on the market. From there, the trend of land speculation will occur, many less knowledgeable people will rush to buy land in the hope of making a profit. This causes risks for buyers and the cash flow will stagnate in the land, negatively affecting the economy.
According to Mr. Nguyen Quoc Hiep - Chairman of the Vietnam Association of Construction Contractors, the recent land auction irregularities mainly stemmed from the determination of starting prices and deposit levels.
"I think there should be a mechanism and regulations so that the auction organizer can decide to increase the deposit rate from 20% to 50% depending on the situation. This will solve the problem of determining the starting price in the context of the old and new Land Laws being intertwined," Mr. Hiep shared.
