The real estate market in the outskirts of Hanoi is witnessing notable improvements. According to Batdongsan.com.vn’s Q3 2024 real estate market data, there has been a significant increase in interest and transactions in the land market. However, this improvement is localized to certain areas, particularly in the northern provinces.
Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn, stated that compared to Q1 2023, land prices in Hoai Duc have surged by 81%, from an average market price of VND 55 million/sqm to VND 100 million/sqm. Meanwhile, land prices in Dong Anh rose by 53%, from VND 41 million/sqm to VND 63 million/sqm. Thanh Oai also experienced a remarkable 90% increase, with average prices climbing from VND 21 million/sqm to VND 40 million/sqm.
Notably, in Q3 2024, land auctions on the outskirts of Hanoi witnessed winning bids that were tens of times higher than the starting prices, indicating unusual market behavior.
Regarding this anomaly, a survey of over 500 real estate brokers found that 38% attributed the high auction prices to FOMO and speculation, while 29% believed that legal changes had driven the increase. Additionally, 21% suspected the involvement of interest groups manipulating land prices in these areas.
In a draft report submitted to the Government Office for the Prime Minister’s work session with several corporations and companies in the real estate and housing sector, the Ministry of Construction provided an assessment of the land market phenomenon.
The report noted that, at the end of 2022 and in Q1 2023, the land market experienced multiple “price spikes,” with a significant increase in transactions in many provinces nationwide, particularly in the outskirts of major cities such as Hanoi, Ho Chi Minh City, Bac Ninh, Lam Dong, and Binh Phuoc.
However, after a short period, both transaction prices and volumes in the land market showed a decreasing trend. By the end of Q1 and Q2 2024, investor interest in this real estate segment rebounded, resulting in increased transaction values and volumes through land auctions in several localities.
These land auctions, held in multiple provinces, attracted enthusiastic participation from investors. A common feature of these auctioned land projects was their advantageous locations, often linked to transportation and urban planning, as well as the availability of completed technical and social infrastructure.
The successful land auctions, with winning bids surpassing the starting prices, have contributed to optimizing state budget revenues for the localities. For instance, a land auction in Tan Yen district, Bac Giang province, for 84 land lots generated over VND 130 billion, a difference of VND 54 billion compared to the starting price. Another auction for the right to use 60 land lots in Viet Lap and Lien Son communes, Tan Yen district, resulted in a total winning bid of more than VND 132 billion, nearly VND 57 billion higher than the starting price…
However, in some exceptional cases, the results of the auctions and winning bids were recorded at extremely high levels. In Hoai Duc district, Hanoi, the winning bid was over 18 times higher than the starting price. On September 8, Thanh Oai district planned to organize an auction for the right to use 57 land plots in Dam village, Muc Xa commune. These plots ranged from 74 to 134 sqm, with a starting price of VND 8.8 million/sqm. Previously, the auction of these plots had to be canceled to re-determine the starting price.
According to current regulations, the starting price for land auctions, in cases where the land has been invested with technical infrastructure, is based on the land price frame. However, the current land price frame is relatively low compared to market prices, making the starting price for auctions very attractive to participants.
Additionally, the requirement for a 20% deposit to participate in the auction is also relatively low, leading to a rush of registrations. In reality, many investors are willing to bid high prices and accept losing their deposits, as the potential for a life-changing windfall outweighs the relatively small deposit amount.
Nevertheless, the intense competition in these auctions has led to socio-economic consequences, such as pushing land prices in the area far above their actual value. While the short-term potential for price increases is limited due to the area primarily serving the residential and investment needs of local residents, it creates a new price benchmark for comparison with neighboring areas…
According to gathered information, there is a trend of investors forming groups or associations to participate in auctions. They bid aggressively, and after winning the auction, they may “forfeit their deposit” to establish a new price level in the area. Subsequently, they sell the surrounding land they had previously purchased at lower prices to make a profit.
It is evident that when apartment prices reach a certain height, land with a “clean” legal status becomes appealing to investors.
The Capital’s Proposal for an Investigation into Anomalously High Land Auction Bids, and Subsequent Forfeiture of Deposits.
The Hanoi People’s Committee has requested that the city’s police force employ operational measures to promptly detect violations in land auctions. They have also proposed solutions to prevent or restrict the continued participation of bidders who consistently place abnormally high bids and then forfeit their deposits.
Unveiling Hanoi’s Mystery: The Story of an Anomalous Land Auction and the Ghost Bidder
The Hanoi People’s Committee has requested that the city’s police force employ operational measures to promptly detect violations in land auctions. They have also proposed solutions to prevent or restrict the participation of bidders who consistently place abnormally high bids and subsequently forfeit their deposits.
The Latest Land Price List: What You Need to Know
The Ministry of Construction has assessed that the application of the new land price framework will have a ripple effect, triggering a surge in the property and housing market. Experts predict a 15-20% increase in prices compared to pre-framework levels, a significant jump that will have far-reaching implications for the industry and consumers alike.
The New Land Price List of Ba Ria-Vung Tau: A 20-30% Surge
The province of Ba Ria-Vung Tau has unveiled a new land price list, with a significant increase of 20-30% compared to previous decisions. The urban land in the central routes of Vung Tau now boasts a premium price tag of up to 78 million VND per square meter, reflecting the region’s growing value and potential.
“Speculators Driving Up Land Prices in Hanoi: The Capital’s Fake Land Frenzy”
“A recent Techcombank Priority report highlights the need for caution among individual investors when it comes to land price appraisal before making investment decisions. The report underscores the importance of diligent research and prudent evaluation of land values to mitigate potential risks and make informed choices.”
