In an interview on the Business Forum Magazine specialty page, Lawyer. Tran Dai Nghia – Investment Project Legal Policy Expert, commented:
“In recent times, localities across the country have been promoting land-use right auctions to generate budget revenues, support economic and social development, and address housing needs for the population. However, some land auctions in the suburban areas of Hanoi have shown signs of irregularity, with winning bids being nearly 30 times higher than the starting prices set by the organizing units.”
To limit the phenomenon of abnormally inflated land prices in auctions like those recently seen in Hanoi, several synchronized measures must be implemented.
Recently, localities across the country have been enhancing efforts to auction land-use rights to generate budget revenues, support economic and social development, and ad- dress housing needs.
However, some land auctions in suburban Hanoi have shown irregularities, with winning bids reaching nearly 30 times the starting price set by the organizers.
This is a concerning situation because land auctions by the government are meant to generate revenue and provide housing solutions for residents with genuine housing needs. Yet, these auctions have become a “golden opportunity” for speculators to profit.
The result is that real estate prices, already high, have soared even further, making the dream of owning a home increas- ingly distant for many citizens, especially the younger gen- eration. The inflated prices of auctioned land, “far exceed- ing” its true value, complicate asset valuation for future auc- tions not only in the locality but also in many other areas across the country.
– To address this issue, several solutions can be considered:
First, auctions should be limited to local residents. Land auc- tions for individuals to build houses should be a measure by district-level authorities to meet local housing needs.
With this purpose, such auctions should only be open to res- idents with permanent addresses in the locality to prevent outsiders from artificially inflating prices and depriving op- portunities for locals genuinely desiring housing.
Several recent auctions have been recorded winning bids nearly 30 times higher than the starting price.
Second, land from winning auctions should not be transferred for at least 3-5 years. The practice of winning auctioned land being resold for profit has become widespread in recent years. There- fore, transactions involving these plots should be restricted.
Third, financial obligations must be fulfilled within 15 days. Win- ning bidders must complete their financial obligations as soon as possible. The longer the completion period, the more oppor- tunity is provided for speculators to engage in resale transac-tions.
Fourth, construction commitments must be met before land can be transferred. In addition to restricting transactions, certain conditions should be placed on the transfer process. For exam-ple, construction should be completed and the asset recorded on the land title before the property can be transferred.
If these conditions are met, the original goal of providing resi-dential land will be achieved, and the issue of land being left idle after auctions will be mitigated. Those with genuine housing needs will make use of the land, while speculators will be dis-couraged as their goal is to minimize capital investment.
Lawyer. Tran Dai Nghia – Investment Project Legal Policy Expert