Me Linh auction land has deposit of only 107 million VND, is there a loophole for "deposit skimming"?

The auctioned plots in Me Linh district (Hanoi) have relatively low deposits, the highest being only 222 million VND/plot. This could create loopholes for more “deposit skimming” teams and groups to appear.

The auctioned plots in Me Linh district (Hanoi) have relatively low deposits, the highest being only 222 million VND/plot. This could create loopholes for more “deposit skimming” teams and groups to appear.

On March 14, National Joint Stock Auction Company No. 5 will open an auction for 18 land plots in Dong Cao village, Trang Viet commune.

The area of the plots ranges from 96 - 194.8 m2. All plots have the same starting price of 5.6 million VND/m2, equivalent to each plot costing from 537 million - 1 billion VND. The deposit will be from 107 - 218 million VND/plot.

The deadline for submitting auction registration documents is March 11. The auction is organized in the form of direct voting in multiple rounds and a minimum of 5 mandatory rounds, with an ascending bid method and a price step of 6 million VND.

Still in Dong Cao village, Trang Viet commune, Joint Stock Auction Company No. 5 - National will continue to auction 15 land plots on March 21.

The plots of land range in size from 100 to 198.09 square meters. The starting price is still VND5.6 million/square meter, equivalent to each plot costing from VND560.4 million to VND1.1 billion. The deposit will be from VND112 to VND222 million/plot.

The deadline for submitting applications is March 18. Similar to the previous session, bidders will vote directly in multiple rounds and at least through 5 mandatory rounds, with an ascending bid method and a step price of 6 million VND.

Groups brazenly advertised price differences right in front of the land auction venue. Photo: Thanh Vu

Sharing with reporters of the Investment Electronic Newspaper - Baodautu.vn , the leader of an auction company said that the starting price of land in the suburban areas of Hanoi is currently determined to be too low. This has caused the deposit amount to be reduced to a modest number.

This person also commented that increasing the deposit rate is unnecessary. The deposit rate of 20% of the starting value of the land plot is a regulation applied by many countries in the world. Instead of considering increasing the deposit, updating the land price to be close to the market price is the most important thing at this time.

“In order to get the winning bid close to the actual selling price, some localities have required multiple rounds of bidding. However, this has turned the issue of ‘price inflation’ from unreasonable to reasonable,” commented the auction company leader.

According to an investor specializing in suburban land auctions, to prevent price inflation, the organizers should only conduct a single round of auctions, instead of multiple rounds as in 2024. In addition, the deposit level should also be increased.

“If the deposit is only around 100 million VND/lot, many groups will be willing to pay a 'cheap' price and then forfeit the deposit. However, if the deposit increases to 500 - 700 million VND/lot, they will pay much more cautiously,” the person shared.

Source: https://baodautu.vn/batdongsan/dat-dau-gia-me-linh-co-tien-coc-chi-107-trieu-dong-lieu-co-ke-ho-cho-luot-coc-d248986.html