The amended draft Law on Property Auctions, presented to the National Assembly on October 19, proposed to raise the minimum deposit for land-use right auctions for individual residential plots from 10 percent to 20 percent of the starting price, while retaining the maximum limit of 50 percent.

These proposals are expected to curb abnormally high bids followed by deposit forfeitures that disrupt the real estate market. However, according to experts, raising initial deposits or tightening participation rights is not enough to resolve the root causes of land speculation and artificial price inflation.

Le Ba Chi Nhan, a respected economist, noted that raising the initial deposit to 20–50 percent of the starting price is a measure intended to increase financial accountability among participants, discouraging bids that far exceed real market value.

According to Nhan, a maximum deposit of 50 percent could create a significant financial barrier, compelling participants to carefully evaluate their capital capacity and post-auction obligations. Consequently, the policy helps filter out financially under-capacitated individuals and deters arbitrary bidding.

However, if deposit ratios are set excessively high, individuals seeking land for personal housing with limited capital may face difficulties. Meanwhile, organizations and individuals with substantial capital reserves will retain an advantage.

Nhan emphasized that policy must balance market discipline with equal access for auction participants.

The expert stressed that deposit forfeiture is not the sole factor distorting land prices. Land values are also influenced by urban planning, supply shortages, crowd psychology, and organized speculative activity.

If initial deposits are raised without accompanying mechanisms to monitor collusive behavior, ensure information transparency, and track unusual transactions, the market will still succumb to alternative forms of manipulation.

Nhan suggested establishing flexible deposit levels based on the nature, scale, and risk of each specific auction, rather than applying a rigid maximum cap. Simultaneously, comprehensive information regarding planning, starting prices, legal conditions, and financial obligations must be disclosed, alongside strict penalties for collusion, dissemination of misleading information, and deliberate deposit forfeiture.

Dr. Tran Xuan Luong, Deputy Director of the Vietnam Institute for Real Estate Market Research and Assessment, argued that while this measure may filter out candidates with weak financial standing, it might not stop large investors with deep pockets.

For those expecting massive profits from driving up land prices, the forfeited deposit may not serve as a sufficient deterrent. Certain actors could even recruit proxies to participate in auctions on their behalf.

According to Dr. Luong, a clear distinction must be made regarding auction motives - whether buying for personal housing, project development, or short-term speculative resale. Management strategies should align with funding sources, property ownership histories, and post-auction land usage.

He also proposed researching appropriate tax policies to curb short-term speculation, alongside creating a unified land database to assist authorities in tracking ownership history and detecting abnormal patterns.

Luong added that pushing initial deposits excessively high may not deliver expected results, as wealthy players can still deploy nominees to enter bids in their stead.

In addition to raising initial deposits, the draft law proposes banning winning bidders who fail to pay full amounts, resulting in canceled auction results, from participating in land-use right auctions nationwide for periods ranging from 6 months to 5 years.

Nhan said this is a strong deterrent that boosts participant accountability and discourages abnormally high bidding designed to create artificial price baselines before withdrawing.

“When certain individuals deliberately inflate prices without fulfilling financial obligations, the consequences extend far beyond a single failed auction. Abnormally high winning prices can serve as a misleading benchmark, stoking speculative sentiment, driving land value expectations higher, elevating housing access costs, and distorting corporate investment decisions,” he noted.

Thus, penalizing intentional deposit forfeitures is also a way to safeguard market transparency.

However, Nhan cautioned against treating all forfeiture cases identically. A distinction must be made between deliberate violations, collusion, and market manipulation versus force majeure events or objective disputes.

Winning bidders may encounter personal emergencies or sudden shifts in financial capacity that prevent them from completing transactions. Therefore, if bans are enforced rigidly, the policy may fail to reflect the true nature of individual cases.

Nguyen Le