The Capital’s Land Auction Fever: A Tale of Phúc Thọ District’s Sky-High Bids and Premature Profiteering.

On August 29, the Phuc Tho District Land Development Center (Hanoi) organized an auction for the land-use rights of 30 land plots in Doc Tranh, Trach My Loc commune, and nine land plots in Dong Phuom, Tho Loc commune, Phuc Tho district.

Each land plot in Doc Tranh has an area ranging from 96 to nearly 149 square meters. With a starting price of VND 23.4 million per square meter, the deposit that participants had to submit ranged from VND 450 million to nearly VND 700 million per plot.

The nine land plots in Dong Phuom have a relatively large area of nearly 235 square meters each. The starting price for these plots was VND 19.8 million per square meter, equivalent to a deposit of nearly VND 535 million per plot.

According to the Phuc Tho District Land Development Center, they received a total of 650 valid registrations for the auction, and more than 350 people participated in the auction directly. In this auction, participants submitted their bids in one round. Immediately after, the auctioneer publicly examined the bids on the spot to determine the winner based on the highest price offered per square meter of the land plot.

At the end of the auction, all 39 land plots were successfully sold. The highest bid was VND 60 million per square meter, 2.6 times the starting price. In addition, many plots were won with bids of VND 51.8 million and VND 48.8 million per square meter.

With the winning bids in Phuc Tho, this auction had a lower difference between the starting price and the winning bid compared to the auctions in Thanh Oai and Hoai Duc.

In reality, the average price of residential land on the main road is about VND 40 million per square meter, while land in the alley is about VND 20-30 million. Thus, the winning bid is about 1.5 times higher than the nearby land price.

In another development, while the auction was still ongoing, many land auction groups on social media were already offering to resell the won land plots at a premium of about VND 400 million, depending on the location and the level of interest from investors. Specifically, brokers offered five plots in Doc Tranh with a premium of VND 400 million per plot. These plots had winning bids ranging from VND 36.2 million to VND 40.4 million per square meter.

Since the beginning of August, auctions in Thanh Oai and Hoai Duc districts have also attracted a large number of participants, with abnormally high winning bids. Especially at the auction in Hoai Duc on September 19, the highest bid was VND 133 million per square meter, 18 times the starting price.

The Vietnam Real Estate Brokers Association (VREBA) stated that the proceedings and results of these land auctions are both abnormal and normal. Nowadays, the boundary between what is normal and what is abnormal seems blurred. Abnormal things have become normal and continue to exist “normally” in an abnormal way.

In fact, this phenomenon is not new. In the first six months of 2024, while the land market, in general, was still sluggish, land auctions in some localities attracted thousands of participants, mostly investors. The winning bids in some places were recorded to be up to ten times higher than the starting price.

On September 10, Lac Viet Partnership Auction Company will organize an auction for 50 land plots in Phuc Tho, including 30 plots in Trach My Loc, nine plots in Tho Loc, and 11 plots in Xuan Dinh, Phuc Tho district, Hanoi.

Specifically, in Doc Tranh, the land plots range from 96 to 148 square meters, with a starting price of VND 23.4 million per square meter. In Dong Phuom, the land plots are approximately 134 square meters each, with a starting price of VND 19.8 million per square meter. In Huong Nam, the land plots range from 99.3 to 196.8 square meters, with a starting price of VND 25 million per square meter. The auction will be held in a closed-bid format, with one round of bidding, and the results will be announced immediately after the auction.