Investors Flock to Land Auctions
The Land Development Center of Dan Phuong District successfully auctioned 85 land plots in a recent event.
The auctioned plots included: two plots in the Dong Say – Tram Sau area (phase 3) and two plots in Dan Phuong commune, with a starting price of 42 million VND per square meter.
67 plots were located on N1 road, Ha Mo commune, with starting prices ranging from 40 million VND to 51 million VND per square meter.
16 plots were in the De Nhi area, Phuong Dinh commune (phase 2), with starting prices ranging from 35 million VND to 41 million VND per square meter.
With 85 plots up for auction, over 1,200 participants registered, indicating a high level of interest. The auction attracted a large number of attendees.
At the end of the auction, all 85 plots were successfully sold. The highest bid reached 99.2 million VND per square meter, double the starting price. These plots were located near the N1 road branch.
In contrast to the dull scene last year, land auctions in the outskirts of Hanoi have consistently drawn the attention of numerous investors since the beginning of this year.
In June, more than 100 plots in Me Linh District were also successfully auctioned, with the highest price exceeding 70 million VND per square meter. Land auctions have been vibrant in Dong Anh and Quoc Oai districts as well.
Caution Advised Against Price Manipulation
Real estate experts predict that, along with legal changes, the real estate market will warm up in the last months of 2024, stimulating investor psychology to some extent.
 Hanoi’s land transactions are inching up, but prices remain high. Investors are advised to be cautious of price manipulation. Illustration: Hong Khanh
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In the land segment, investors assess that with the Business Law 2023 in effect and its new regulations restricting “plotting and selling land,” auctions attracting many investors are also a move to anticipate the market.
However, experts warn that in Hanoi’s market, where housing supply falls short of demand, auctions attract not only genuine buyers but also speculators. Therefore, it is possible that some investors manipulate prices in auctions to inflate the value of surrounding lands for profit…
In reality, after many auctions, numerous “land brokers” appear on social media groups dedicated to land trading, offering auctioned plots at the winning bid price plus a premium depending on the location. Nearby lands are also hastily advertised for sale.
The CEO of a Hanoi-based company evaluates that Hanoi’s land transactions are gradually improving, but prices remain elevated. Land investors are still selling at a loss in many places. To achieve liquidity, investors have to accept losses. However, the loss ratio has decreased, from 30-40% previously to around 20% now.
According to him, compared to the peak prices in 2021, there are areas where losses reach 30%.
Mr. Thanh Cong, director of a real estate exchange in Ha Dong, said that land sold at a loss is mainly in provincial areas far from the center. Lands close to the center, on major roads, or in populous areas experience minimal price reductions and fewer sales.
“Land transactions have shown positive signs recently, but a significant leap is not expected due to high prices. Many investors are still in the stage of observing and studying the market.
Hong Khanh
