Hoài Đức Land Auction: Unraveling the Story Behind the Skyrocketing Prices
On August 21st, regarding the unusually high land auction in Hoai Duc district, Hanoi, a leader of the Hanoi Department of Natural Resources and Environment shared insights with the press. The official noted that recently, land auctions in the suburban areas, conducted by the districts, have seen prices soar compared to the market’s average, even reaching twice or thrice the regular rates.
The 19 plots of land in Hoai Duc that were successfully auctioned off at exorbitant prices ranging from 91 to 133 million VND per square meter. Photo: HUU HUNG
The department is currently coordinating with the police to investigate and clarify the actions of a group of people who are suspected of “pumping” land prices.
While the land auctions are organized by the local authorities, the Hanoi Department of Natural Resources and Environment has taken the initiative to intervene in cases where the winning bids are abnormally high. It has been observed that most participants in these land auctions are not genuine homebuyers but rather groups with certain motives.
“We are waiting for the deadline for the payment of the winning bids to assess the situation,” said the leader of the Hanoi Department of Natural Resources and Environment. “This price manipulation creates waves that will push up the prices of surrounding land, hindering the healthy development of the real estate market.”
Previously, a record-breaking auction of 19 plots of land in the LK03 and LK04 areas of Lon Truc village, Tien Yen commune, Hoai Duc district, Hanoi, lasted for almost 19 hours. After nine rounds of bidding, the plot LK03-12 reached a staggering 133.3 million VND per square meter, more than 18 times the starting price. This plot measures 113 square meters, bringing its total value to approximately 15 billion VND.
The second-highest bids were for plots LK03-06 and LK04-06, which reached 127.3 million VND per square meter. The other plots fetched winning bids ranging from 97.3 to 121.3 million VND per square meter. The two lowest bids were 91.3 million VND per square meter, still 12.5 times the starting price.
Notably, as observed by Nguoi Lao Dong newspaper, while the investors were engaged in the auction, real estate brokers outside were live-streaming the event on social media platforms to inflate prices for speculative gains. Immediately after the auction ended, these brokers advertised the plots with premiums ranging from 300 to 600 million VND.
Some attendees of the auction deemed the prices, exceeding 100 million VND per square meter, excessively high, especially when land on the main road nearby was trading at much lower rates.
According to the price history tool on batdongsan.com.vn, the average asking price for land in Tien Yen commune, Hoai Duc district, in the second quarter of 2024, was around 43 million VND per square meter, a 48% increase compared to a year ago. In the communes neighboring Tien Yen, land prices ranged from 22 to 62 million VND per square meter, depending on location and transportation convenience.
The interest in and prices of land in Hanoi’s suburban areas have risen due to planning factors and auction activities. In the first half of 2024, land in the districts of Dong Anh, Gia Lam, Thach That, and Quoc Oai (Hanoi) witnessed a surge in search volume, ranging from 48% to 104%. This increased demand pushed up land prices in Hanoi’s outlying districts by 4% to 24% compared to the second half of 2023.
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