Winners and losers in the auction game

While there is consensus that auctioning public assets is necessary, the right thing to do is create a fair playground for all participants. It helps bring more money to the State budget and gives auctioneers a chance to acquire the property of their choice.

In theory, an auction is a public activity where everyone can participate as long as they have the financial capacity. However, for many people, auctioning is like a game, almost a gamble in which they always emerge as losers.

Some recent land auctions in localities proved precisely this. Around a year ago, a man from Vinh Dien Ward in Dien Ban Town in the central province of Quang Nam won three land lots at VND29 million per square meter, nearly twofold the starting price of VND15 million, the local media reported.

But late last month, the People’s Committee of Dien Ban Town issued three decisions to cancel the auction results because the man delayed paying the land use fee as per regulations.

He was the winner but, for some reason, failed to pay for what he won.

In another case in the central province, a man beat other competitors to take all 13 land lots in Dien Hong Commune in an auction in June 2021. He saw a landslide win over others after bidding double that of all the starting prices. For example, a land lot was as large as 134 square meters priced at VND492 million but was pushed up to over VND1.042 billion.

In October last year, the government

of Dien Ban Town had to issue a series of 13 decisions to call off all the auction results for the same reason: the winner delayed paying for all the land lots he had won.

All games have rules that need to be followed. The two men mentioned above could have been charged a penalty for their actions. But running away after pushing up the auction price left the property market to face the consequences. And to some extent, it deprived those who need accommodation of a chance to buy a house.

Of course, all the failed land auctions will be auctioned again, and perhaps with a new starting price. As the Ministry of Construction said in the article, “Homes Grow More Unaffordable” is no surprise to see the housing prices rising.

Let’s wait and see the case of the notorious land auction in the Thu Thiem New Urban Area in HCMC’s Thu Duc City, as two players have quit the game while two others are delaying paying for the auction winning bids.

It’s high time to come up with solutions to improve auction regulations as mentioned in the story “Keeping Suspicious Auctions in Check” in your last week’s publication.