Recently, the Land Fund Development Center of Thanh Oai district (Hanoi) determined that the deadline for paying for the land auction of 68 plots in Ngo Ba area, Thanh Than village, Thanh Cao commune expired on August 10, but only 13 plots had been fully paid for.
The lots that were paid for only had the highest price of 55.167 million VND/m2. The remaining lots, including the lot with the highest winning price of 100.5 million VND/m2, did not pay.
In fact, the phenomenon of "price inflation" at real estate auctions is not new. Many speculator groups participating in 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.
Mr. Do Danh Luc (living in Ha Dong district, hometown in Thanh Oai district) is upset, his family is living in an apartment, wanting to buy a piece of land in the countryside to build a house.
Auction land is the preferred choice because of its legality and convenient location. However, those who have real needs cannot buy it because the auction land price is too high compared to reality.
Mr. Luc said that before the auction, the land price in this area only fluctuated between 35-50 million VND/m2. However, after the auction, the land price jumped to 80-100 million VND/m2, which is unacceptable.
"The high auction prices not only make us lose opportunities but also make the real estate market unstable," Mr. Luc added.
Sharing with Lao Dong reporter, Associate Professor Dr. Dinh Trong Thinh - Senior Lecturer of Academy of Finance - said that pushing up land auction prices and then canceling deposits will cause many consequences to the real estate market.
First, it causes difficulties for those with real needs and investors in the recovery process of the real estate market. Worse, it creates pressure and difficulties for the Government in managing and implementing land laws and policies. The State will have more difficulty in reclaiming land and clearing land because land prices have been inflated and disturbed.
To make this activity stable and suitable for reality, according to Associate Professor, Dr. Dinh Trong Thinh, some adjustments need to be made.
First, the local land auction organizer must re-determine the starting price closer to the market price. From there, the deposit price will be raised.
Along with that, there needs to be more technical adjustments. For example, the deposit must be completed before the auction takes place. After the auction, the winning bidder must pay the money within about 15 days, instead of 90 days as before or 30 days as some localities are applying now, which is too long.
Meanwhile, financial expert Nguyen Ngoc Tu - Lecturer at Hanoi University of Business and Technology, said that to avoid repeating this bad scenario in the future, tax tools can be applied to customers who win the auction.
"Within 24 months, the auctioned lots cannot be transferred. If transferred, taxes and fees must be calculated based on the winning bid price. This will help limit speculation and stabilize the market," Mr. Tu suggested.
