Land Auction Fever
The Ministry of Construction’s real estate market report for Q1/2024 indicates that post-Tet holiday, property prices have slightly increased, and transactions have been quite active. Local authorities have organized more land auctions in urban and new residential areas compared to the same period in 2023.
In Hanoi, the People’s Committee of Chuong My district organized an auction for 44 contiguous land plots (area ranging from 170-360m2/plot) in the Van Son Golf Course Resettlement Area project, Hoang Van Thu commune, with starting prices from VND 5.5-8 million/m2;
The People’s Committee of Dong Anh district auctioned 72 land plots (area ranging from 87.5-167m2/plot) in the infrastructure construction project of Thuy Lam land use right auction area with starting prices from VND 23.5-24.5 million/m2.
Son Tay Town People’s Committee also auctioned 31 land plots (area ranging from 94-140m2/plot) in the Infrastructure Construction project of the Van Goi – Dong Quan land use right auction area with starting prices from VND 28-33 million/m2.
Many localities have actively organized land auctions in urban and new residential areas recently,
It is reported that the land auctions in Hanoi have attracted considerable attention from investors. Accordingly, Quoc Oai district successfully auctioned 34 land plots belonging to 3 projects DG02; DG08 Khanh Tan village, Sai Son commune, and DG06 Can Huu commune with a total area of 3,100 m2 on April 25, with over 150 customers participating.
The starting price for the lowest plot was VND 24.8 million/m2, and the highest was VND 52.8 million/m2. The auction successfully sold all 34 plots. The highest bid was VND 74.1 million/m2, a difference of over VND 21 million/m2 compared to the starting price. The plot with the lowest winning bid was VND 28 million/m2, over VND 3 million higher than the starting price.
At the end of March, Me Linh district also successfully auctioned 30 land plots, with one plot reaching over VND 50 million per m2, almost double the starting price. At the end of February, all 33 plots in Thuy Lam commune, Dong Anh district, were successfully auctioned, with one plot double the starting price at over VND 60 million per m2.
In Binh Dinh, the provincial People’s Committee approved the auction of 84 land plots (area ranging from 105-135m2/plot) in the Northern residential area project of Nhon Binh ward social housing with starting prices from VND 15-21.6 million/m2; 23 (area ranging from 140/158 m2/plot) land plots in the Binh Tuong commune resettlement area project with starting prices from VND 6.6-10.2 million/m2; 15 land plots (area ranging from 124.5÷362.5m2/plot) in the Long Van new urban area with starting prices from VND 19.2-25.2 million/m2; 9 land plots in the Resettlement Area for the National Highway 1D upgrade and expansion project with starting prices from VND 14-18.6 million/m2; 12 land plots in the Resettlement Area for the construction project of the Ha Thanh River North Urban – Commercial Area with prices from VND 22-26.4 million/m2.
Kien Giang Provincial People’s Committee organized the auction of 167 plots in the Cai Tre canal residential area, Kien Luong district, with a starting price of VND 220 million/plot, and 43 plots in the sea dike residential area through Vinh Quang ward, Rach Gia city.
“This factor could contribute to a more active land market in the coming period,” the Ministry of Construction said.
Avoid creating virtual land fever
The Ministry of Construction also reported that the transaction volume in the land segment increased in Q1/2024 compared to Q4/2023. Land transaction volume was 119.86% compared to Q4/2023 (with 81,476 land transactions in Q4/2023) and 145.18% compared to the same period in 2023.
Meanwhile, the real estate market report for Q1/2024 and forecast for Q2/2024 by the Vietnam Association of Realtors (VARS) assesses that many areas have witnessed a surge in land transactions, especially for subdivided plots.
Notably, there has been an increasing number of investors seeking land in suburban areas of major cities and localities with strong infrastructure development and rapid urbanization.
Although successful transaction prices have decreased by 20-30% compared to the peak, they are gradually stabilizing and showing no further signs of decline. Compared to Q4/2023, prices have increased by about 5%. The suburban market of Hanoi and areas near industrial zones have seen an increase of 10-20%.
However, VARS also warns of the need to pay utmost attention to avoid the formation of “virtual fevers,” which could pose risks to market safety as it is still in recovery.
