Positive signal
With the state's macro adjustments such as allowing localities to adjust starting prices down and loosening real estate business credit, the land auction segment is showing signs of recovery.
In the context of the frozen real estate market , transactions related to the auctioned land segment in the first months of 2023 have also been quiet. Compared to previous years 2021 and 2022, in the first 9 months of 2023, the number of products and transactions related to auctioned land has decreased significantly, only 30% compared to the same period, there are areas put up for auction but there are no buyers.
However, in recent times, there have been many bright spots in land auctions in the province.
Specifically, Thinh Son commune (Do Luong) put 8 plots of land up for auction, with 28 customers registering to buy and 7 plots sold; Thuong Son commune planned 15 plots for sale, with 41 customers registering and selling 9 plots; Quang Son commune planned 16 plots for sale, with 41 customers registering and selling 9 plots; Nam Son commune put 16 plots for sale, with 64 customers registering and selling 9 plots; Lac Son commune put 13 plots for sale, with 61 customers registering and selling 13 plots; Boi Son commune put 16 plots for sale, with 62 customers registering and selling 14 plots...
A representative of the Property Auction Service Center (Department of Justice), which is the unit organizing the auction of many land lots in Do Luong district, said: Each land lot put up for auction for exploitation in Do Luong, has 3-4 registration files. Although the number of files sold has decreased compared to before, this is a quite positive signal compared to the general level. The auction price has not increased much compared to the starting price and the minimum price to be paid (ranging from 10-20%), but the Do Luong area has kept the heat for land auctions in the whole province.
Since the beginning of the third quarter, positive signals have expanded to Nghi Loc and some other localities. Mr. Nguyen Phan Khoi - Deputy Head of the Finance and Planning Department of Nghi Loc district said: In 2023, the district plans to put about 200 land lots into exploitation with a total amount of about 220 billion VND. However, by the end of August, the district had completed the auction beyond the plan with an amount of about 400 billion VND. Unlike before, many land auctions had no buyers or even successful auctions were still worried that land buyers would abandon their deposits, but the above phenomenon has decreased, the buyers are mainly local people, after buying, they immediately pay money to get the title.
Since July, the land auction market in Nghi Loc district has been bustling. Specifically, the land in front of the Nghi Thuan commune People's Committee headquarters was auctioned and sold out 100%. After that, 4 more lots were auctioned and sold immediately, with a price difference of 7% compared to the starting price. In Quan Hanh town, 4/4 lots were sold; Nghi Phong commune auctioned in hamlet 1 in the first round and sold 34/38 lots, the auction price increased by 25% compared to the starting price; Nghi Phong commune continued to auction 29/29 lots in the second round, increasing by 22% compared to the starting price; Nghi Xa commune sold 34/36 lots; Phuc Tho commune sold 14/14 lots; Nghi Truong commune was about to auction 40 lots but sold up to 400 sets of documents.
Learning more, we learned that although the general color of Nghe An's auctioned land market is quite quiet and investors are cautious, each specific area and locality has shown signs of improvement. Specifically, at the end of June, Nghia Dan district auctioned 40/40 land lots in Tan Hong block, Nghia Dan town; Nam Giang commune (Nam Dan) through 3 auctions sold 72/72 lots with an average price from 700 to 1.5 billion VND/lot.
Need a push to create momentum
The developments and results of the auctions show that the land auction market in Nghe An has shown signs of recovery. However, according to investors, these are only isolated cases and do not reflect the market trend in the coming time.
The reality is that while in the districts, the land auction segment has more or less restarted, in Vinh City and the towns of Cua Lo, Hoang Mai or Thai Hoa, the market is still "inactive". The auctions in Thai Hoa town, Hoang Mai town or Cua Lo town, Vinh City are lacking buyers.
Mr. Nguyen Van Tu - Director of Vinh City Land Fund Development Center said: According to the plan, this year the city will put more than 1,000 products/lots of land for sale and the budget revenue from land fund exploitation is expected to be 1,200 billion VND. However, by the end of September, the city had only auctioned about 10 lots of land and all auctions had no buyers. Although since July, wards and communes have proposed to reduce the starting price, because the price reduction is not much, the market has not improved.
From now until the end of the year, the city is expected to auction about 300 plots of land, including 50 plots in Hung Dong commune, 60 plots in Nghi Kim commune, 60 plots in Hung Dung ward, 30 plots in Nghi Duc commune and nearly 100 plots in Nghi An commune. However, because the starting price is still quite high, specifically the latest 55 plots in Kim Trung hamlet, Nghi An commune have an average price of 2-4.6 billion VND/plot, it is not easy to attract investors.
The land auction situation in Thai Hoa, Hoang Mai and Cua Lo towns is almost similar. Mr. Nguyen Ngoc Tuan - Head of the Finance and Planning Department of Thai Hoa Town shared: Thai Hoa enjoys a special mechanism of the province, leaving 100% of land use fees to invest in urban infrastructure. Therefore, recently, the Town has urgently completed infrastructure and procedures to put nearly 100 land lots in 4 wards up for auction, but the market is quite quiet, the starting price is still quite high so there are not many buyers.
Mr. Nguyen Quoc Khanh - Chairman of Nghe An Real Estate Association said: The starting price of land in urban areas is currently based on the price level at the time of land fever in late 2021 and early 2022, so few people buy. Experience in the districts shows that if a reasonable starting price is given, local people will buy, instead of investors buying for speculation and surfing like before.
According to investors, the land auction segment in some districts showing signs of recovery is supported by quite positive information. Specifically, Do Luong district is supported by the fact that it will become a town in the near future, with fairly synchronous infrastructure investment; the locations that Do Luong district put up for auction for exploitation in the communes are all beautiful locations with convenient transportation, so they are highly appreciated by investors.
An investor in Vinh City further analyzed: The land plots in Nghi Loc District that have many buyers are all about to be merged into Vinh City such as Phuc Tho, Nghi Phong or neighboring Vinh City. In addition, in Nghi Loc and Dien Chau, the industrial park infrastructure investment and business corporations such as WHA and VSIP are investing in expansion , which means that there will be more investors leasing land, so the demand for land for housing for workers and experts in the communes of Nghi Thuan, Nghi Xa, Nghi Long (Nghi Loc), Dien Tho, Dien An (Dien Chau) has affected the psychology of investors.
Although the land auction market in some districts is showing signs of recovery, the general context is that the economy is in recession, businesses, especially small and medium enterprises, have been severely affected after 2 years of Covid-19, so it is very difficult for the real estate market in general and the land auction market in particular to recover in the short term. It must be at the latest by the end of the year and early 2024, when the State's macro adjustment policies take effect; real estate business loan conditions are loosened, deposit and lending interest rates decrease and the economy overcomes difficulties, investment capital flows back to the real estate channel, then the real estate market will flourish and recover.
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