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 VND 42 million per square meter.
67 plots were located on N1 road in Ha Mo commune, with starting prices ranging from VND 40 million to VND 51 million per square meter.
16 plots were in the De Nhi area of Phuong Dinh commune (phase 2), with starting bids ranging from VND 35 million to VND 41 million per square meter.
With 85 plots up for auction, over 1,200 participants showed interest, resulting in a competitive bidding process. The auction attracted a large number of attendees, and all 85 plots were successfully sold.
The highest bid reached VND 99.2 million per square meter, double the starting price, for plots adjacent to the N1 road branch.
In contrast to the subdued atmosphere last year, land auctions in the outskirts of Hanoi have consistently drawn the attention of investors since the beginning of the year.
In June, more than 100 plots in Me Linh District were successfully auctioned, with the highest price exceeding VND 70 million per square meter. Dynamic land auctions also took place in Dong Anh and Quoc Oai districts.
Caution Advised Against Price Manipulation
Real estate experts predict a warming of the market in the final months of 2024, influenced by legal changes. This forecast is expected to stimulate 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. Photo: Hong Khanh
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In the land segment, investors believe that the enforcement of the 2023 Real Estate Business Law, with its new provisions restricting “plotting and selling land,” makes these auctions a strategic move to anticipate market trends.
However, experts caution that Hanoi’s real estate market faces a supply-demand imbalance. Auction events attract not only genuine buyers but also speculators. Consequently, there is a possibility of price manipulation by investors aiming to profit from inflated prices in surrounding areas.
In reality, after auctions, numerous “land brokers” emerge on social media groups dedicated to land trading, offering auctioned plots at the winning bid price plus a premium based on location. Nearby lands are also hastily advertised for sale.
The CEO of a Hanoi-based company assesses that while Hanoi’s land transactions are gradually improving, prices remain elevated. Land investors are still facing losses in many places. To improve liquidity, investors are compelled to sell at a loss, but the rate of loss has decreased from 30-40% to around 20%.
According to this CEO, compared to the peak prices in 2021, some areas have seen losses of up to 30%.
Mr. Thanh Cong, director of a real estate exchange in Ha Dong, noted that the majority of land sold at a loss is concentrated in provincial areas far from the city center. Lands close to the center, on major roads, or in populous areas experience minimal price reductions and lower sales volume.
“While land transactions have shown positive signs recently, a significant leap is not expected due to persistently high prices. Many investors are still in the phase of market research and observation.
Given the challenging economic climate, investors should carefully consider the hype surrounding land in peripheral areas. The apparent bustle may not reflect genuine investor activity but could be influenced by land broker tactics,” advised Mr. Cong.
Hong Khanh
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