According to a report by Batdongsan.com.vn, the real estate market in the first 6 months of 2024 recorded a boom when real estate ranked first in terms of investment yield, surpassing both gold and stocks.
The market effect recorded the continued trend of moving to suburban areas, in which land plots gradually became an attractive segment for buyers.
The Land Law, Housing Law and Real Estate Business Law, which were applied early from August 1, are expected to help the real estate market flourish with positive adjustments.
However, in reality, in the first days of applying the new Law, the real estate market immediately became as hot as a frying pan when there was a sudden increase in prices in some suburban land auctions.
From a starting price of only a few million VND/m2, land on the outskirts of Hanoi is auctioned for up to hundreds of millions VND/m2, although many people consider it not outstanding in terms of infrastructure, traffic, and slow profit potential.
Starting price is the source?
Sharing about this issue, Lawyer Dang Van Cuong - Chinh Phap Law Office, Hanoi Bar Association, said that due to the continuous changes in gold prices, the sluggish stock market, business activities affected by the supply chain and fluctuations in the world market, real estate is still the priority choice of investors as a safe haven for cash flow.
According to Mr. Cuong, the laws related to real estate that took partial effect from August 1, 2024 stipulate that individuals and businesses are not allowed to buy land, divide plots, or sell land; only the state is allowed to divide plots and organize auctions.
This creates a scarcity of supply, affecting the psychology of customers and investors, who will concentrate heavily on land auctions like the recent one.
Besides, the lawyer said that the reason why land prices are pushed up is because the principle of the auction is that whoever pays the highest price will win the bid.
Meanwhile, the auction of the above plots of land attracted the attention of thousands of people who registered and directly participated in the auction. "This proves that there are a lot of people interested, with so many people, it is entirely possible that the price will be pushed up," Mr. Cuong analyzed.
In addition, Lawyer Dang Van Cuong also raised a possible case that "up to now the authorities have not concluded" is the situation of land price inflation with the motive of manipulating the real estate market by some individuals or organizations.
Lawyer Dang Van Cuong - Chinh Phap Law Office, Hanoi Bar Association.
Lawyer Dang Van Cuong said that part of the fault for the above situation came from determining the starting price of the auction too low.
Previously, the starting price for the auction was based on the price given by the Advisory Council. However, according to Decree No. 12 issued in February 2024, the starting price will be determined by the locality based on the land price list multiplied by the coefficient.
"Currently, it is the transition period of implementing the new 2023 Land Law documents, which have only partially come into effect, most of which will not take full effect until January 1, 2025.
Thus, the problem is that the regulation on abolishing the land price frame has not yet taken effect, so the regulation on the old land price table will be applied until the end of this year. Therefore, the calculation formula is still based on the old land price table multiplied by the coefficient K to get the starting price, causing this price to be low," said Lawyer Cuong.
Lawyers say that the sudden high land auction prices are partly due to the fact that the starting auction price was set too low. (Photo: Huu Thang)
However, Mr. Cuong also emphasized that the provision of the Government's Decree was not wrong, but at this time of intersection, the documents had not yet taken effect synchronously, leading to the story that the new land price list had not been established, so the above situation occurred.
From the low starting price, investors will only need to deposit a very small amount of money, which continues to cause the risk of taking advantage of this point for some organizations participating in the auction to push up the desired price, take personal advantage and then cancel the deposit.
Meanwhile, there is another story that the Law on Property Auction will not take effect until early 2025, thereby severely handling cases of deposit default by banning participation in auctions from 6 months to 5 years.
Currently, the regulations on handling auction participants who abandon their deposits are still too administrative, lacking deterrence and thorough handling, so many individuals or organizations have taken advantage of this loophole to disrupt the market.
Should not collect all the budget revenue through land auctions
Expressing his opinion on overnight land auctions, Lawyer Vu Ngoc Bang - Deputy Director of Galaxy Law Firm, Hanoi Bar Association said that although not public, the auction without limiting the number of rounds overnight to finalize the final price may have been a precedent, not the first time.
The advantage of this form of auction is that it will bring the budget a large and almost "sudden" amount of revenue because the price increases dramatically through each round, and the final price allows the State to bring in hundreds of billions of dong through each auction.
Lawyer Vu Ngoc Bang - Deputy Director of Galaxy Law Firm, Hanoi Bar Association.
On the positive side, this will help supplement the budget through auctions that ensure all legal regulations are met.
However, on the contrary, Lawyer Vu Ngoc Bang said that "the consequences of land being sold at too high a price are more terrible than the economic benefits it brings".
At the same time, the Lawyer also affirmed that the land auction organizations in the recent hot auctions completely complied with the provisions of the law, but whether the auction participants had a spirit of respect for the law or not is another story, and we need to wait for the conclusion of the investigation agency.
"If auction participants have a situation of "blue team, red team" for personal gain, participating in the auction with the purpose of manipulating the market will cause long-term consequences, causing land prices in that area to be pushed up into a real estate "bubble". Solving this problem will be many times more difficult than the benefits from the budget collected in the short term," Mr. Bang analyzed.
Sharing the same view, Lawyer Dang Van Cuong shared that the State does not need to collect all the land in land auctions.
"Because if the price is high, the State will gain an immediate benefit of a slightly higher amount of money, but then the land will be abandoned and speculators will inflate the price, so the land will not be put into use or exploited, even though it is a valuable resource, the consequences will be much more serious," the lawyer said.
Land auctions should be temporarily suspended and land prices should be closer to market prices.
Accordingly, to prevent similar land fever cases from occurring again, Lawyer Dang Van Cuong said that temporarily suspending land auctions to conduct inspections is completely reasonable.
Especially in the context of the Laws being intertwined but not yet synchronized, "completely changed" so there are still many loopholes for individuals or organizations with bad intentions to take advantage of for profit.
In addition, Mr. Cuong also proposed a plan to quickly review the method of calculating starting prices in auctions, speeding up the process of completing land price lists close to market prices.
Lawyers suggest that land auctions should be temporarily suspended and land prices should be closer to market prices (Photo: Huu Thang).
For investors, the lawyer also suggested that they should clearly determine the time to put money in, the time to take money out, and determine how the market in that area will increase and decrease.
Avoid the situation where you rush to invest according to market psychology and then end up not being able to "escape" in time, it will be like holding a debt, the possibility of loss is very high.
In addition, the expert said that investors also need to be wary of areas where real estate prices are skyrocketing but there is no new infrastructure or policies or population fluctuations around.
For those who want to buy for real estate, Mr. Cuong advises to choose the right time and location to choose the right real estate product for long-term settlement.
Source: https://www.nguoiduatin.vn/gia-khoi-diem-qua-thap-tao-co-hoi-truc-loi-trong-cac-phien-dau-gia-dat-204240828161143386.htm
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