No investors have registered to bid for 3,790 resettlement apartments in the Thu Thiem new urban area project in District 2, HCMC, which have been put up for auction by the city government, according to Sai Gon Giai Phong newspaper.

A resettlement apartment project in the Thu Thiem new urban area project in District 2, HCMC

Pham Van Sy, director of the property auction center under the HCMC Department of Justice, said the auction did not take place on February 8 as scheduled as neither organizations nor individuals had shown interest in the sale.

Of the 3,790 units, 2,220 were built by Thuan Viet Company and the remainder by Duc Khai Company. The city government will work with relevant agencies to revalue these apartments and put them up for auction again.

Those interested in the auction are required to place a deposit equivalent to 20% of the value of each unit and make full payments within three months. If they fail to pay on time, they will be fined 0.05% of the cost on a daily basis.

Tran Khanh Quang, a real estate expert, said the requirement is too stringent for most property firms. The deposit should be lowered and the package be divided into smaller ones, he proposed.

Tran Trong Tuan, director of the HCMC Department of Construction, said the city currently has nearly 14,000 apartments and land lots for resettlement, of which more than 8,500 units will be used for 460 urban rehabilitation projects and the rest will be auctioned to recover capital for the city budget.

The city will sell 5,200 units via auction, with 3,790 of them belonging to a program to build 12,500 resettlement homes for Thu Thiem new urban area in District 2, 1,000 to a resettlement area in Vinh Loc B Commune, Binh Chanh District, and 200 in Phu My resettlement area in District 7.

According to the Department of Construction, the redundancy of such a huge number of resettlement homes has resulted from relaxed compensation policy. In the past, compensation for land taken back from residents was based on State-fixed prices which were always lower than market levels, so residents normally preferred ready-built resettlement apartments.

But now land clearance compensation rates match market prices, and prices of resettlement apartments are higher than before. Affected people are more inclined to take compensation money and look for homes they want.

The regulation that developers must build resettlement apartments before they can relocate households in their project sites has also led to a redundancy as many affected residents have refused ready-built apartments.

These resettlement apartments are not treated as social homes as they cost higher. Developers of resettlement apartment buildings are required to pay the land use fee while builders of social homes are exempt from this fee.

In related news, the city government has decided to auction resettlement land lots totaling 30 hectares in Nam Rach Chiec, District 2. The reserve price is VND7.9 million per square meter for lots with roads of 10-12 meters in width and VND8.8 million for land lots with 25-meter-wide roads.

The District 2 government, the municipal Department of Planning and Architecture and the center for land development are assigned to hold auctions for these land lots.

The Department of Finance will assist the land development center to promptly complete valuation documents and submit them to the city government for approval.

Nam Rach Chiec residential and resettlement area covers 60 hectares, including 30 hectares of resettlement land for the Thu Thiem new urban area project.

SGT