From "price anchor point" to "liquidity test
According to the Vietnam Real Estate Market Research and Evaluation Institute (VARS IRE), in the past, auctioned land was often considered a price "anchor point" of the local market. For residential land auctioned for people, the high winning price often creates a reference effect, causing the price level in neighboring areas to be quickly adjusted accordingly.
Meanwhile, for land plots auctioned for project development, the winning price directly affects the cost of capital of enterprises. When land costs increase, investors are forced to recalculate product structure, financial plans and selling prices to ensure investment efficiency.
However, the market balance is gradually changing as the supply of auctioned land tends to increase. After the process of arranging administrative units, along with the need to create resources for infrastructure investment and urban development, many localities are reviewing planning and land use plans to bring more eligible land funds to the market.
In the context that capital costs are still a factor to consider, investors' tastes also change and differentiate clearly. The increasing supply of auctioned land makes the level of competition between land plots increasingly clear.
Investors have more choices, and at the same time consider more carefully between auctioned land, land in existing residential areas and real estate products in major cities nearby. Therefore, the mentality of "buying at all costs" gradually decreased, causing the winning bid price to no longer be as high as in the previous period.
In parallel with that, investment sentiment is also shifting in a positive direction, from chasing land plot fevers to long-term investment thinking. Customers are increasingly prioritizing products with transparent legal frameworks, synchronously planned infrastructure and long-term exploitation potential.
The winning bid price gradually reflects the actual value.
According to VARS IRE, another important factor affecting the land auction market is new regulations aimed at increasing transparency, limiting deposit abandonment and reducing speculative auctions.
Increasing the deposit level and increasing the requirement for financial capacity makes the cost of participating in auctions higher, especially in the context of the new land price list being applied, leading to an upward trend in the starting price. This is considered an effective filter for groups of investors using financial leverage or participating in auctions with short-term surfing goals.
According to feedback from members of the Vietnam Association of Realtors in some localities, auction participants are now more cautious, carefully assessing factors such as location, infrastructure, exploitation capacity and actual housing needs, instead of just betting on short-term price increases.
Mr. Tran The Dung - Head of the Executive Board of VARS Ninh Binh - said that from the beginning of the year to now, Ninh Binh province has recorded two large auctions, including the auction of the right to use 161 residential land plots in the central residential area of Gia Thanh, Gia Tran commune and the auction of 40 residential land plots belonging to 9 residential areas in Hoa Lu ward.
In which, in Gia Tran commune, the winning bid price decreased by about 30% compared to previous rounds. After the auction, buying and selling activities were also quite quiet. In Hoa Lu ward, the winning bid price decreased by about 10%; notably, many cases paid the same starting price, showing that cautious psychology has been more clearly shown in the act of participating in the auction.
These developments partly show that land auctions are gradually reducing their role as "leading price expectations" as in the previous period. Auction participants consider more carefully, while the winning price is increasingly dependent on location, infrastructure, exploitation capacity and actual needs of each area.
According to VARS IRE, the land auction market is entering a clear phase of differentiation. Land plots with transparent legal status, synchronous infrastructure, meeting real housing needs are still capable of maintaining high price levels. Conversely, areas that once increased sharply mainly due to expectations of price increases or short-term speculation will be under greater adjustment pressure.
