On October 28, expressing opinions on the results of monitoring the implementation of policies and laws on real estate market management, National Assembly deputies proposed many solutions to handle the situation of abandoning deposits after winning land auctions, and emphasized the need to strictly punish these cases to avoid profiteering and market manipulation.
Proposal to increase progressive stakes for each round
Debate with the viewpoint of delegate Hoang Van Cuong (Hanoi delegation) about the impossibility of increasing the deposit, delegate Duong Van Phuoc (Quang Nam delegation) pointed out the reality of the auction of a sand mine in Quang Nam, with a starting price of more than 1 billion VND, but after 200 rounds of auction, the price jumped to 375 billion VND. The regulated price of sand is 150 thousand VND/m3, but after the auction, it increased to 2.3 million VND/m3.
The delegate said that the goal of the participants in the above auction was to win at all costs and then... leave the stake, aimed at monopolizing, monopolizing and pushing up prices.
“The law stipulates that only 20% of the starting price is set, meaning that if we set a starting price of 1.8 billion VND, the deposit is only 200 million VND, and if we spend 200 million VND to achieve our goal, the enterprise is willing to forfeit the deposit to achieve the intention of monopoly, monopolization and raise the price, causing difficulties for people and enterprises,” the delegate analyzed.
Sand prices have been pushed up very high, and this has directly affected all public investment projects in Quang Nam. Many projects in other places and people have encountered many difficulties in purchasing these common construction materials.
Continuing the above evidence, delegate Duong Van Phuoc also mentioned the reality in Hanoi, many land auctions "last all night long", specifically the one in Ha Dong district recorded an auction price of up to 262 million VND/m2. The delegate said that there were signs of irregularities here, leading to the risk of paying high prices and then abandoning the deposit.
The Quang Nam delegation cited a report from the Ministry of Natural Resources and Environment after inspecting land auctions in Thanh Oai district, finding that 56/58 lots won high prices. The winning bidders showed signs of abandoning their deposits after the auction. “Auctions without substance will become a tool for manipulation, the trading market will become a place for profiteering, and we need to severely punish them,” said delegate Phuoc.
To avoid “bidder theft”, delegates proposed increasing the deposit price and increasing the deposit progressively with each round to force bidders to consider when intending to cancel the deposit. Along with that, there should be strong sanctions to prohibit businesses that cancel the deposit from continuing to bid in other fields. “For example, in the auction of construction materials, we will not allow them to bid anymore, only then can we limit these cases”.
Handling auction winners who deposit assets equivalent to the auction value
Previously, speaking at the meeting, delegate Hoang Van Cuong (Hanoi delegation) said that the deposit should not be increased, because if the deposit is increased, it will limit the number of people participating in the auction, causing a loss of competitiveness. Instead, it is necessary to add more conditions for auction participants.
The delegate analyzed that the deposit fee is currently regulated from 5 to 20%, for example, with a real estate initially priced at 10 billion VND, the deposit will be 2 billion VND and not everyone participating in the auction can buy that real estate immediately, but maybe out of 10 participants, only 1 person can buy.
Thus, many people find that they have to put down a large deposit without being sure that they will be able to buy, so the cost of putting down a deposit naturally creates a psychological barrier, an obstacle to economic calculation, so very few people will register to buy.
On that basis, delegate Cuong said that the deposit should not be increased, but it is necessary to stipulate additional conditions that auction participants must meet.
Specifically, auction participants must prove that they have sufficient financial capacity to purchase the auctioned property, through real estate assets or bank deposits. If the auction winner abandons the deposit, this person will be dealt with by having assets equivalent to the auction value. “At that time, you can bid as much as you want, but if you abandon the bid, your bank account and land title will be taken to court and frozen for handling,” the delegate further clarified.
By applying this regulation, those who do not have money but participate in the auction only to buy and then resell will not have enough conditions to prove, will not be able to participate, and those who really want to buy this real estate for their own use will be able to prove it immediately.
The Hanoi delegation affirmed that the above measures will help filter out bidders who are really interested in buying, and especially those who pay high prices and then abandon their deposits will certainly have their assets confiscated at a very high value, thereby preventing abandonment of deposits like in the recent past.
“Proving financial capacity is done when submitting documents, not when we start the auction. Thus, we have enough conditions and time for participants to prepare as well as for the auction management agency to control,” the delegate added.
Delegate Cuong also expressed agreement with delegate Duong Van Phuoc's view on strictly handling cases of paying high prices and then abandoning deposits.
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