How to prevent speculation and price inflation?

Recently, land prices have increased dramatically, especially with consecutive "waves" of land auctions. Previously, in Hanoi , Hoai Duc district organized an auction of 19 land lots in Long Khuc village, Tien Yen commune. Of which, there was a land lot with an offer price of 133.3 million VND/m2 - more than 18 times higher than the starting price. This land lot has an area of ​​113m2, so the total value is up to 15 billion VND. Meanwhile, in Thanh Oai district, 68 land lots in Thanh Than village, Thanh Cao commune were auctioned, of which there was a land lot with an offer price of up to 100 million VND/m2, 8 times higher than the starting price.

Faced with the above-mentioned "hot" developments in the auctioned land segment, the Prime Minister has issued a directive to rectify land auction activities. The Ministry of Natural Resources and Environment has also had to send a team to conduct a surprise inspection of land use rights auctions in Thanh Oai and Hoai Duc districts to check compliance with regulations on determining starting prices, assessing the conformity of auction winning prices with actual land prices on the market; conditions, procedures for organizing land use rights auctions, on-site inspection of the land put up for auction, and other related contents.

Experts say that increasing the deposit value will limit speculation, price inflation, and disruption to the real estate market. (Illustration photo)

It can be seen that the above land locations in the two districts are quite far from the center of Hanoi. Although the technical and social infrastructure are not really good, when the auction was held, a "wave" of price increases occurred, making many people involved "dizzy". And, it is understandable to wonder whether there were acts of "price inflation", speculation, and profiteering occurring in these auctions.

Because in fact, in recent times, in many auctions in localities across the country, many people participated with the purpose of speculation, willing to put down a deposit to participate in the auction and win at an extremely high price, then willing to forfeit the deposit if they cannot sell it. This is also a concern for localities every time they organize a land auction.

According to regulations, the maximum deposit value is 20% of the starting price. Real estate experts say that this is completely reasonable because a high deposit level will limit those who drop their deposits and cause disturbances, affecting the results of auctions for personal gain.

However, in reality, due to the determination of a low starting price, too different from reality, the value of the deposit compared to the land price after the auction ends is only 3-5%, even in some cases only corresponding to 1%. This leads to the situation of deposit cancellation for many reasons, possibly due to miscalculation, possibly due to collusion to push up prices... If the deposit price is from 10-20% of the actual value of the winning plots, this situation will not occur. This is considered an effective solution in the context of land plots showing signs of "virtual fever" as it is today.

Legal experts also believe that the phenomenon of localized land price increases in some localities will have an impact, losing the advantage of attracting local investment capital, disrupting land use planning and affecting the macro economy. Therefore, the authorities need to improve the efficiency of land use rights auctions.

Along with that, in addition to propaganda work, management agencies need to strengthen inspection and supervision of the organization and operation of asset auction organizations, monitor compliance with the law, and comply with the Code of Professional Ethics of the auction team. At the same time, it is necessary to promptly rectify and strictly handle violations, if any, of asset auction organizations, auctioneers and related individuals and organizations.

Source: https://congthuong.vn/tinh-trang-sot-nong-dau-gia-dat-o-ha-noi-phai-ngan-chan-tinh-trang-dau-co-thoi-gia-the-nao-341105.html