Consequences behind sluggish land auctions

Auction n...

In May 2023, Phu Dien commune (Nam Sach) held the first auction for 34 land lots in residential area No. 1, Ly Van village - Phong Trach (phase 2) but no one registered to buy. In August 2023, the locality continued to hold the auction again but still no one registered.

In November 2022, the People's Committee of Minh Tan Commune (also in Nam Sach District) organized the first auction for 55 residential land lots at the new residential area No. 2, Uong Thuong Village, with a starting price of 8 million VND/m2. As a result, 8 land lots were successfully auctioned, while 47 plots remained unsold. In June 2023, the locality organized the second auction with the same starting price, but only 2 more land lots were successfully auctioned.

According to statistics from the Finance and Planning Department of Nam Sach district, from the beginning of 2023 to now, Nam Sach district has organized 6 land auctions but only 3 had customers buying documents. The rate of successfully auctioned land lots is low, in which Minh Tan commune reached more than 4%, Cong Hoa commune reached nearly 6%...

Located in a prime location with convenient traffic right next to Provincial Road 391, the central residential area of ​​Van To Commune (Tu Ky) has 81 land lots auctioned with the expectation that they will "sell like hotcakes". However, when the People's Committee of Van To Commune organized an auction of more than 60 land lots, divided into 2 times in July and September 2023, no one bought the auction documents.

Mr. Truong Ngoc Thanh, Head of the Finance and Planning Department of Tu Ky district, said that from 2022 to now, most land auctions in the district have fallen into a slump. In 2022, Tu Ky district's land use fee collection fell short of the target assigned by the ordinance, and the district's public investment plan had to be adjusted 4 times. In the first 10 months of 2023, the district's land use fee collection only reached about 20% of the target assigned by the ordinance.

Similarly, from the beginning of 2023 to the end of October, Gia Loc district organized 5 land auctions, all of which were re-auctions, including a residential area that had organized the auction for the 9th time but still had 10 unsold plots of land. This situation also occurred in many other localities in the province.

Many difficulties

According to Mr. Nguyen Khac Hung, Chairman of the People's Committee of Minh Tan Commune, in 2022, the locality expected to collect more than 16 billion VND from the auction of land in the new residential area No. 2 of Uong Thuong village, but in reality, it only collected about 5 billion VND. In 2023, the revenue from land auctions continued to fall short of the plan. "The Resolution of the Commune Party Congress sets a target of building 2 inter-village roads by 2025 with a total investment of about 8 billion VND. The main source of investment capital is waiting for land auctions. The prolonged sluggishness of land auctions makes this goal difficult to achieve," said Mr. Hung.

Mr. Nguyen Van Tuan, Vice Chairman of the People's Committee of Van To Commune (Tu Ky) shared that in 2023, the locality expected to collect about 30 billion VND in land use fees, but so far, it has not received any money. Mr. Tuan said: "Van To Commune was assigned by the district to strive to reach the new rural area goal in 2023. Currently, the commune has not met 2 criteria for advanced new rural areas, which are the criteria for schools and roads. With the current land auction situation, the locality has to postpone the goal of completing the advanced new rural area until 2025."

Through research in many localities in the province, the sluggish land auctions in recent times have many causes, the main ones being the sluggish real estate market, economic downturn, and "frozen" real estate transactions. Reality also shows that the land auction market is becoming healthier, reflecting the actual demand for residential land of the people. The situation of "land brokers" has decreased sharply. The sluggish land not only greatly affects local budget revenue and public investment plans, but also slows down the urbanization process.