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Ho Chi Minh City
Friday, October 22, 2021

Only property firms eligible for Thu Thiem land auction

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HCMC – HCMC will continue to auction the three land sites of R1, R2 and R3 and 14 apartment blocks with 2,220 units in District 2 in the coming months, and this time, only eligible property firms will be permitted to attend.

Under the plan approved by the city government, firms joining the auction must make a deposit equivalent to 20% of the starting price by bank transfer. Deposits by bank guarantees are not applicable.

The Land Fund Development Center of HCMC will be in charge of the auction and preparations are underway.

Unlike previous auctions, the city will only allow property firms to participate. According to the HCMC Department of Natural Resources and Environment, buyers cannot be individuals seeking to buy homes to live in but enterprises running a property business.

Moreover, products for sale are land-use rights and land-attached assets that are of high value, cover 45,971.4 square meters and hold 2,220 AA apartments.

To attend the auction, firms must meet requirements such as being active in the property business, using land sites in accordance with land planning and use purposes and committing to paying the bid price given in the contract.

Speaking of the auction, the director of a property firm in HCMC noted that due to the impact of the Covid-19 pandemic, the auction might not attract many potential buyers. However, if the city keeps the starting price unchanged from previous auctions, there is a slight chance the auction will be successful, he added.

According to the director, firms are hesitant to buy old apartments that have no residents, as these apartments have a high risk of deterioration. Thus, successful buyers may incur extra costs for repairs or demolition and rebuilding activities.

Enterprises do not know the state of the apartments in advance, and shoddy repairs can affect the reputation of enterprises. Moreover, rebuilding apartments is expensive.

“The auction of land sites in Thu Thiem is not simply a financial matter, as construction quality is a concern too. It would be more feasible for HCMC to put up land sites for auction, enabling firms to develop their own projects. Unfinished, deteriorating apartments are a hard problem to solve,” stated the director.

HCMC in 2007 auctioned 3,790 resettlement apartments in Thu Thiem at a starting price of VND8.8 trillion. The starting prices in 2018 and 2019 were VND9.1 trillion and VND9.936 trillion, respectively.

The three auctions had no participants as the total value of the land sites and land-attached assets was high. If a firm wins a bid, it needs to pay the deposit within 1-3 months.

By Le Anh

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