On the morning of October 28, National Assembly delegates presented views on the implementation of policies and regulations in managing the real estate market. Many raised concerns about sky-high real estate bids at auctions in certain localities, only for these bids to be later forfeited.

Bidders must prove financial capacity

National Assembly representative Duong Van Phuoc from Quang Nam raised concerns that ongoing overnight real estate bidding practices in Hanoi, where bidders push prices sky-high only to forfeit, could destabilize the property market.

Representative Nguyen Thi Thuy from Bac Kan highlighted the heightened competition in suburban Hanoi, where land auctions have become more intense than ever. “Bids sometimes last through the night, with hundreds, even thousands, of people waiting patiently, ready to pay record-high prices for land,” she stated.

“Prices in suburban districts now exceed 100 million VND per square meter, comparable to well-developed project land. Land values in certain localities are setting new benchmarks, outpacing local incomes,” Thuy remarked.

Representative Hoang Van Cuong from Hanoi proposed an alternative solution to curb forfeitures, suggesting that raising the deposit amount is not viable, as it would reduce participation and diminish competition.

Cuong recommended instead that participants must prove they have the funds to pay for the property if they win. He proposed that bidders could verify their financial standing through bank statements or assets like real estate. He also suggested that if a winner forfeits, their assets should be frozen for auction enforcement. “Such requirements would enable legitimate buyers to participate while discouraging those bidding high only to back out, skewing market prices,” he explained.

Higher deposits may limit competition

Representative Duong Van Phuoc from Quang Nam countered Cuong’s view, arguing for increasing the required deposit amount. He cited an example of a recent sand mine auction in Quang Nam, where the starting bid was just over 1 billion VND, but after 200 rounds, the bid skyrocketed to 375 billion VND. Following the auction, the price of sand surged from 150,000 VND per cubic meter to 2.3 million VND.

Phuoc described how these auction participants prioritized winning at any cost, often planning to forfeit afterward. “These practices suggest that corporations are monopolizing prices, creating significant challenges for local residents and enterprises. This dynamic is also impacting public investment projects in Quang Nam,” he stated.

Phuoc also cited a specific auction in Hanoi’s Ha Dong District, where overnight bidding reached 262 million VND per square meter. He suggested that such extraordinary bids indicate possible collusion or speculative motives, raising the likelihood of high bids followed by forfeitures.

Citing a Ministry of Natural Resources and Environment report, Phuoc highlighted an audit in Hanoi’s Thanh Oai District, where 56 out of 58 high-value land parcels won at auction were ultimately forfeited. "If auctions are merely a tool for market manipulation, they fail to reflect genuine buyer interest," he argued.

To address this issue, Phuoc proposed increasing deposits incrementally with each round and enacting stricter penalties for forfeiting bidders.

Increased conditions rather than higher deposits

In explaining his proposal against raising deposits, Hoang Van Cuong clarified that the current deposit rate ranges from 5% to 20% under existing regulations. He explained, "For a property with a starting price of 10 billion VND, a deposit of 2 billion is already substantial, and only one out of ten participants ultimately secures the property."

“People may be discouraged from participating in auctions if they are required to put down a large deposit without assurance of winning,” Cuong noted, adding that such financial hurdles could reduce overall participation and competition in auctions.

However, Cuong reiterated that increasing financial conditions for bidders, such as requiring proof of real estate assets or bank funds, would ensure that participants are genuine. He suggested that forfeiting participants should be penalized with asset seizure equivalent to the auction’s final bid price, which would act as a significant deterrent to speculative bidding.

“Implementing such a rule would effectively keep those without genuine financial means from participating simply for resale, while allowing real buyers to verify their eligibility,” Cuong concluded.

Quang Phong