Why have real estate projects in Quang Ngai not found investors?

A series of "huge" projects have not found investors yet

First of all, the Vinh Hoa Residential Area Project, after more than 1 year of being approved by the province for investment policy, with 2 approvals of preliminary assessment results of capacity and experience and 1 extension of registration time, but there is still no qualified investor to register for implementation.

Vinh Hoa Residential Area Project, located in Pho Hoa Ward, Duc Pho Town, was approved for investment by the People's Committee of Quang Ngai Province in May 2023, through bidding to select investors. The total investment capital of the project is about 177 billion VND and the project's operating period is 49 years, from the date of the decision on land allocation and land lease.

Project implementation area of Hang Duong urban service and marine tourism area at My Khe beach (Tinh Khe commune, Quang Ngai city).

Recently, the People's Committee of Quang Ngai province issued a decision approving the preliminary assessment results on the capacity and experience of investors registering to implement the Vinh Hoa Residential Area project. In particular, the People's Committee of Quang Ngai province also stated that up to now, there has been no investor meeting the preliminary requirements of capacity and experience to implement the Vinh Hoa Residential Area project.

This is also the second time Quang Ngai province has announced that it has not yet found an investor with sufficient capacity and experience to implement the Vinh Hoa residential area project.

It is known that in mid-November 2023, after a period of searching, Quang Ngai province announced that it had not found a qualified investor to invest in the Vinh Hoa residential area project. And in early 2024, Quang Ngai province extended the registration period for the project by over 10 days.

The My Tra - My Khe residential area project is considered a "golden land" in Quang Ngai and has been abandoned for many years.

This is also the common situation of real estate projects in Quang Ngai province. Specifically, the Hang Duong Urban Service and Sea Tourism Area project at My Khe beach (Tinh Khe commune, Quang Ngai city), with an area of over 22,480 m2, starting price of 130 billion VND. However, when selling auction documents, no one came to buy. Or the 10.2 ha land plot at the My Tra - My Khe residential area project after many unsuccessful auctions to select investors.

According to the Quang Ngai Provincial Land Fund Development Center, in 2024, the province plans to bid and auction 19 residential and urban area projects implemented by the Department of Natural Resources and Environment of Quang Ngai province and 12 other projects implemented by sectors and localities.

Specifically, in 2024, according to the plan issued by Quang Ngai province (Decision 139/QD-UBND, dated January 31, 2024), the total revenue from land use fees for the Quang Ngai budget is expected to be nearly 3,900 billion VND, of which the revenue from the auction of land use rights for projects is about 2,069.5 billion VND; the rest is the revenue from bidding for residential and urban area projects.

With the above plan, the Quang Ngai Provincial Land Fund Development Center believes that it is at risk of not being able to be implemented due to many difficulties related to the real estate market.

Why was the auction unsuccessful?

Statistics show that the total budget revenue in the first 6 months of 2024 of Quang Ngai province reached 15,279 billion VND, an increase of 21.1% over the same period last year. However, the revenue from land use fees was too low, only 239 billion VND in 6 months (while in 7 months it reached 272 billion VND).

According to the report of the Department of Natural Resources and Environment of Quang Ngai, the total feasible land use revenue in 2024 of Quang Ngai province is expected to be more than 248 billion VND. For land use rights auction projects, there are 12 projects with a revenue of about 205 billion VND and 1 residential area and urban area project from the project through bidding with a revenue of about 43 billion VND. Compared to the central budget estimate of 2,600 billion VND, in 2024, Quang Ngai's land use fee collection will only reach about 9.6%.

According to the Department of Natural Resources and Environment of Quang Ngai province, the low land use fee revenue is due to the recent sluggish real estate market. Due to economic difficulties, investors are not interested and do not have the need to use land to implement projects; it is difficult to attract and call on customers to participate in land use rights auctions, leading to difficulties in successful land use rights auctions.

Director of the Quang Ngai Provincial Department of Finance Nguyen Van Luyen said that currently, there are no investors participating in land auction projects, and investors are slow to implement real estate projects that have been bid. While the central government's land use revenue assigned to the province is too high, the province's actual revenue is expected to not reach the plan, leading to difficulties in managing public investment in the province. At the same time, in the past, Quang Ngai has strengthened many measures to promote investment, but so far the effectiveness is still low.