Land auctions in Hanoi suburbs gradually "cool down"

After only 2-3 months, the winning prices of many auctioned land lots in the suburbs of Hanoi have decreased by 20-50%. Areas that used to be the focus of investors such as Hoai Duc, Thanh Oai, Phuc Tho are gradually "cooling down".

After only 2-3 months, the winning prices of many auctioned land lots in the suburbs of Hanoi have decreased by 20-50%. Areas that used to be the focus of investors such as Hoai Duc, Thanh Oai, Phuc Tho are gradually "cooling down".

Image of land auction participants leaving the hall after the session ended. Photo: Thanh Vu

All reduction

No more overnight events, no more record numbers, the land auctions in the suburbs of Hanoi in November 2024 have gradually "cooled down". This is clearly shown through the number of people registering to participate and the winning prices of the land lots.

Previously, in August 2024, the public was abuzz with the auction of 19 plots of land LK03 and LK04 in Long Khuc area, Tien Yen commune, Hoai Duc district. The image of more than 400 people tensely competing until 4 a.m. in this auction was unprecedented.

What was even more shocking was the “unprecedented” winning price, the highest being 133.3 million VND/m2. The remaining plots also had sky-high winning prices, ranging from 97.3 to 121.3 million VND/m2. Even the plot with the lowest winning price reached 91.3 million VND/m2.

However, just 3 months later, the land auction in Long Khuc area, Hoai Duc district has lost its appeal. On November 4, the auction of 20 plots of land LK01 and LK02 recorded an average winning price of only 91 - 97 million VND/m2. Of which, the highest price was 103.3 million VND/m2; the lowest was 85 million VND/m2. The number of people participating in the auction also decreased sharply, from 400 people to about 140 people.

With fewer participants, the level of competition is reduced, preventing the winning bid from being pushed too high.

A similar decline occurred in the auction of 32 plots LK05 and LK06 on November 11. Although these plots are relatively well-located in Long Khuc area, investor interest has decreased significantly. The number of participants has dropped to about 120 people. Many plots had winning prices of only 79.3 million VND/m2 - a level never recorded in the previous two auctions.

Besides Hoai Duc, another district also labeled as “virtual land price” is Thanh Oai. In August 2024, the auction of 68 land plots in Ngo Ba area, Thanh Than village, Thanh Cao commune received 4,600 registration applications. Notably, the lot with the highest winning price reached 100.5 million VND/m2; the lowest was 51.6 million VND/m2.

However, similar to the scenario in Hoai Duc, the recent auction in Thanh Oai witnessed a different situation. No longer exceeding the hundred million dong threshold, 25 plots of land in Do Dong commune only recorded the highest winning price of 90.3 million dong/m2; the lowest was 45.3 million dong/m2. Even the number of registration documents decreased by 11 times, down to 400 sets.

While Hoai Duc and Thanh Oai districts recorded a 10-20% decrease in winning prices after 3 months, the auctioned land in Phuc Tho district witnessed a decrease of up to 50% after only 2 months. In September 2024, the auction of 13 land plots in Doc Tranh area (Trach My Loc commune) had the highest winning price of up to 75 million VND/m2. The number of people participating in the direct auction was 100 people.

However, these “sky-high” numbers soon came back to earth. Also in Doc Tranh area, the auction of 12 plots of land on November 11 had a completely different result. The highest winning price dropped to 37.6 million VND/m2. The number of investors bidding in the hall was only 32 people.

Why the price drop?

Sharing with Dau Tu Newspaper reporter, Mr. TN, a person who participated in land auction in Hoai Duc district, said that they themselves also felt confused by the new price level of the market. Since the beginning of the year, land prices in Tien Yen commune (Hoai Duc district) have nearly doubled. Not only auctioned land, but even residential land has reached 100 million VND/m2.

“If I bid low, I won’t win the auction, if I bid high, it will be difficult to find a buyer. I still have a corner lot in Long Khuc area, the winning price was 121 million VND/m2, I sold it for 300 million VND more but still couldn’t find a buyer,” said Mr. TN.

Land prices that are too high will affect liquidity. In case they cannot find customers, the groups will have to forfeit their deposits, with an amount of about 150 - 250 million VND/lot. Normally, in each auction, the groups will try to "hold" 1 - 2 plots of land or more. Not only that, they also participate in auctions in many different areas at the same time. If the deposit is forfeited in every auction, the financial loss will be huge.

“To ensure that the plots of land are easy to sell, many groups do not dare to pay high prices. In Long Khuc area, only plots under 85 million VND/m2 are easy to sell. This is the reason why many people participating in the two recent auctions left one after another when they saw the price climb to 90 - 100 million VND/m2,” Mr. TN shared.

Explaining why recent auctions have had few registrations, a tycoon who once held four auction lots in Hoai Duc said that the groups had spent too much money on previous auctions, so they no longer had enough finances to continue participating.

“With fewer participants, the level of competition is reduced, preventing the winning bid from being pushed too high,” he added.

Source: https://baodautu.vn/batdongsan/dat-dau-gia-vung-ven-ha-noi-dan-ha-nhiet-d230564.html