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Thu Thiem land auction: The Economic Committee pointed out a trick to inflate prices


The Economic Committee has comments on the auction of land use rights in Thu Thiem New Urban Area, Ho Chi Minh City and evaluates the positive and negative impacts arising from this auction.

The winning price is extremely high: The party leaves the deposit, the party is late to pay

The Economic Committee has just released a report on reviewing the promulgation and implementation of the law on auction of land use rights, which mentioned a lot about the Thu Thiem land auction.

Assessing the results of the auction of land use rights in lots 3-5, 3-8, 3-9 and 3-12, the Economic Committee of the National Assembly said that: This is an auction of valuable land lots. the largest to date, with the total winning price of up to VND 37,346 billion, 7.09 times higher than the starting price of the auction.

From the perspective of asset auctions, the fact that medium enterprises auctioned at prices many times higher than the starting price in the land use right auction case in Thu Thiem New Urban Area has maximized the cash receipts. state books. In case enterprises after winning the auction do not fulfill their financial obligations, they will be subject to the penalty of losing a large deposit, which will be remitted to the state budget.

According to the Economic Committee of the National Assembly, the above regulation easily leads to a situation where the winning company loses the deposit, does not fulfill the obligation to pay land use levy, then the auction result will be canceled. cancel.

In fact, Viet Star Real Estate Investment Co., Ltd and Binh Minh Trading and Development Investment Co., Ltd. have applied to terminate the contract of sale and purchase of auctioned properties of land lot 3.9 and land lot 3.12, subject to loss. deposits. The People's Committee of Ho Chi Minh City has decided to cancel the auction results of land use rights of land lot 3.9 and land lot 3.12.

Up to now, there is no information about the remaining 2 enterprises, Dream Republic Joint Stock Company and Sheen Mega Joint Stock Company, paying land use fees according to regulations.

“Whether the winning company will fulfill its commitment to pay the land use levy according to the winning result or will unilaterally cancel the commitment, after the land auction in Thu Thiem, there are also a number of issues that need to be resolved. interested", the Economic Committee assessed.

Specifically, in case the winning company fulfills its commitment to pay the land use fee according to the winning results, the land price level in Thu Thiem area in particular, in Ho Chi Minh City in general, will be pushed up. a higher level, giving rise to some complex problems, negative effects,

For the real estate market, the case of winning the auction of land use rights with a price many times higher than the starting price, then using this price as reference information, determining the land price will create a new (even much higher) price level for the vicinity of the auction site. This will benefit new projects that have been allocated land and have paid land use fees, but disadvantaged projects that have been approved but have not yet paid land use fees or projects that will carry out land acquisition. for future clearance.

The cases of winning the auction of land use rights with prices many times higher than the starting price also affect the psychology of investors, leading to an increase in the prices of housing products, real estate already or is being offered for sale near the auction site. In case the investor offers a house selling price too high but is not accepted by the market, it may increase the inventory of high value.

Rising land prices will increase input costs and lead to an increase in housing and real estate prices; It is difficult for businesses to invest in affordable and low-priced housing projects, but they are forced to invest in high-class and super-luxury real estate to serve the very high-income groups in society. be able to recover capital and do business effectively, further increasing the imbalance between high-end housing and low-income housing.

"Rising housing prices will make it more difficult for people, especially low- and middle-income groups, to access housing," the Economic Commission said.

The increase in land price will also make it difficult for land acquisition, compensation, support and resettlement for projects using land for defense and security purposes and socio-economic development. national and public interest...

The "price blow" trick

According to the Economic Commission, in case the auction winning company unilaterally requests to terminate the auctioned asset purchase and sale contract, first of all, complicated problems still arise, negatively affecting the whole society; At the same time, this may be a form of "price blowing" for businesses to take advantage of pushing up land prices in the area to take advantage of selling real estate that that business or related businesses are doing business with. business in Ho Chi Minh City and surrounding areas.

Taking advantage to polish the company's image to increase corporate value to issue bonds, increase stock prices, increase value of capital contribution to joint ventures, buy and sell debt, buy and sell projects.

Restructuring debts at credit institutions through re-signing mortgage contracts with land use rights (will be re-valued towards increasing mortgage value), potentially causing disorder and failure. the credit and banking system if not strictly controlled by competent authorities.

The unilateral cancellation of the winning contract by the auctioneer enterprise may reduce the price of land in Thu Thiem New Urban Area, gradually returning to its real value, but also create difficulties for localities in organizing the auction. re-auction and auction of subsequent land lots.

The Economic Committee of the National Assembly pointed out the causes of limitations and inadequacies in the auction of land use rights in Thu Thiem New Urban Area. It is unclear and not specific regulations on equity conditions, bank guarantee commitments, demonstrating transparency, feasibility of capital mobilization, feasibility of investment plans. doing business on the auction winning land.

The deposit determined at the starting price is converted into a deposit to secure the performance of the contract, while the winning bid is many times higher than the starting price, so the payment obligation is not yet binding. use the land of the winning enterprise.

The time from the time of land auction to the deadline for paying the winning bid is quite long (180 days as in the case of Thu Thiem) which may cause the companies participating in the auction to implement intentions such as "inflating" any real estate. Real estate to increase stock value, restructuring debts in banks, selling backlogged goods...

For Land Lot 3-5, Auction lot area: 6,446 m2. Starting price: 578,042 billion VND. The auction winner is Dream Republic Joint Stock Company. The winning price is 3,820 billion VND (equivalent to 660% of the starting price).

Lot 3-8 has an area of ​​8,568 m2. Starting price: 1,018,594 billion VND. Auction winner: Sheen Mega Joint Stock Company. Auction winning price: 4,000 billion VND (equivalent to 392.7% of the starting price).

Lot 3-9, auction land area is 5009 m2. Starting price: 728.6 billion VND. Auction winner: Binh Minh Trading and Investment Company Limited. The winning price was VND 5,026 billion (equivalent to 689.8% of the starting price).

Lot 3-12, Auction lot area is 10,059 m2. Starting price: 2,942 billion VND. The auction winner is Viet Star Real Estate Investment Co., Ltd. Winning price: 24,500 billion VND (equivalent to 832.76% of the starting price).