The distortions and irregularities in land auction activities are causing public outrage, with many arguing that competent authorities need to intervene and take stronger action to thoroughly address this problem…
Regarding land auctions, the real estate market has recently witnessed record-breaking winning bid prices for land in the suburban districts of Hanoi .
A prime example is the 19-hour auction, which concluded at 4:30 AM on August 20th. Nineteen plots of land in Tien Yen commune, Hoai Duc district, Hanoi, were successfully sold. The highest-priced plot fetched 133.3 million VND/m2, approximately 30 times the starting price. Besides this plot, 11 other plots also achieved prices above 100 million VND/m2. The two plots with the lowest winning bids were 91.3 million VND/m2, still 12.5 times the starting price.
This result is considered highly unusual because, according to data from Batdongsan.com, the common asking price for land plots in Tien Yen commune in Q2/2024 was only 43 million VND/m2. Furthermore, asking prices in neighboring communes in Hoai Duc district also ranged from 22 to 62 million VND/m2 in Q2/2024.
Previously, on August 10th, an auction of 68 land plots took place in Ngo Ba area, Thanh Than village, Thanh Cao commune, Thanh Oai district, Hanoi. After the auction concluded, the highest winning bid was over 100 million VND/m2, eight times higher than the starting price. Regular plots also fetched winning bids ranging from 63 to 80 million VND/m2, 5 to 6.4 times higher than the starting price.
Thus, compared to the common asking price of 27 million VND/m2 in the second quarter, the winning bid prices of 63 - 100 million VND/m2 for land plots in Thanh Cao commune in the auction on August 10th were 2.3 to 3.7 times higher.
These two land auctions with unusually high prices not only attracted public attention but also brought to mind the unprecedented auction at the Thu Thiem Urban Area in Ho Chi Minh City at the end of 2021.
Specifically, on December 10, 2021, Viet Star Real Estate Investment Co., Ltd. (a subsidiary of Tan Hoang Minh Group) won the auction for a land plot of over 10,000 square meters in Thu Thiem for 24,500 billion VND, setting an unprecedented record with a price of 2.4 billion VND per square meter, eight times the starting price, causing a shockwave in the real estate market for a long time.
It can be seen that the auctions in Hoai Duc, Thanh Oai, and Thu Thiem, despite differing in location, timing, and starting prices, all share one thing in common: the winning bids are many times higher than the general market price. Land prices far exceeding their true value not only create difficulties in appraising assets for subsequent auctions in the auctioning localities, but also have a widespread impact on many places across the country.
This situation raises public suspicion of "manipulation" by land speculators and brokers to create liquidity in surrounding areas that are currently "dormant." This land auction does not represent the prevailing market price and could become a tool for speculators to drive up land prices. This behavior risks negatively impacting the government's efforts to reduce housing prices and ensure social welfare, and could even cause economic stagnation due to the expectation of selling land at high prices.
The distortions and irregularities in land auction activities have been causing public outrage. Many opinions suggest that competent management agencies need to quickly intervene and promptly rectify the land use rights auction process, thereby strictly dealing with acts of exploiting auctions to disrupt the real estate market for profit.
As a professional real estate investor, Mr. Le Minh Trung (residing in Cau Giay district, Hanoi) said that he has been following many land auctions recently and has been asking himself who is behind inflating real estate prices in those auctions? Because after these opaque land auctions, only a few people benefit, while the majority of investors, including brokers, suffer losses.
"The reality is that the allure of real estate profits is too great; in just one morning of auction, the profit is equivalent to several years' income for an average worker. That's why investors still rush in regardless," Mr. Trung said, emphasizing that to thoroughly address the practice of land auctions for speculation and price manipulation, one cannot rely solely on the self-awareness of investors, but depends heavily on the decisive actions of state management agencies.
Similarly, Ms. Tran Kim Nga (residing in Go Vap district, Ho Chi Minh City), who experienced both the gains and losses during the bursting of the real estate bubble, also believes that investors must fight for their own survival, but the role of state management is irreplaceable in ensuring transparency in the real estate market.
"Instead of chasing after speculative bubbles, meaning waiting for the bubble to erupt before making announcements and warnings, local authorities should be transparent about planning and projects from the outset. With transparency, no broker or speculator can spread rumors to cause chaos and instability in the real estate market anymore," said Ms. Nga.
From the business perspective, Mr. Tran Khanh Quang, General Director of Viet An Hoa Real Estate Company, affirmed that real estate businesses do not benefit from land price surges because it takes several years from the planning stage to the completion of legal procedures for sales. Land prices soaring in other areas, coupled with projects not yet having completed compensation, can negatively impact businesses.
Meanwhile, economist Phan Dung Khanh analyzed that real estate is inherently a niche market due to its large and very large capital requirements. Therefore, the image of people queuing from morning till night to secure plots, resell land, and receive deposits... is just a pre-arranged scenario. This not only traps individuals and causes them to lose money but also pushes the market to the brink of freezing because real estate prices have been pushed to unimaginable levels.
"With land auctions, in the short term, we can increase the deposit amount, charge fees for land plots transferred early after the auction, etc., but in the long term, to be sufficiently deterrent, a universal and comprehensive solution that could be considered is to prosecute those who manipulate the market," Mr. Khanh emphasized.
Sharing the same view, lawyer Le Thu Thao from the Ho Chi Minh City Bar Association also stated that manipulating the real estate market is very dangerous, but the sanctions imposed are not yet sufficiently deterrent.
According to lawyer Le Thu Thao, Vietnamese law currently has provisions on the crime of "stock market manipulation," clearly outlining the signs of market manipulation and disruption as a basis for criminal liability for violations. Therefore, the act of disrupting the real estate market, causing dangerous consequences for society, could also be considered for criminalization.
"In my opinion, it is necessary to study and create a new crime in the Criminal Code related to the manipulation of the real estate market for personal gain. We absolutely cannot allow public speculation, anxiety, and worry about land auctions suspected of being 'inflated,' as this both erodes public trust in authorities and diminishes the strictness of law enforcement," lawyer Thao suggested.
09:28 18/09/2024
Source: https://kinhtedothi.vn/dau-gia-dat-de-dau-co-day-gia-che-tai-chua-du-ran-de.html
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