The winning price of the second auction was lower than the first.
At the end of the auction of 20 plots of land in Hoai Duc district (Hanoi) on November 4, the lot with the highest winning bid was 103.3 million VND/m2, 14.1 times higher than the starting price, equivalent to a total value of about 15 billion VND. The lowest lot had a price of 85.3 million VND/m2, 11.6 times higher than the starting price.
The auction lots this time are about 400m from Ring Road 4 and are located right next to 19 lots LK03 and LK04 - the lots that once set a record for winning price in Hoai Duc district at 133 million VND/m2. Although located close together, the winning price this time is much lower.
In addition, the number of people participating in this auction was only 1/5 compared to the previous auction. Mr. Nguyen Van Son (Phu Tho) - a bidder said that compared to the auction on August 19, the organization of the auction on November 4 was more scientific and methodical. However, the winning price level in this auction was still high.
According to Batdongsan.com's price history tool, the common selling price of land in Tien Yen commune, Hoai Duc district, Hanoi in the third quarter of 2024 is 62 million VND/m2. Over the past year, land prices here have increased by 87.9%.
The selling price in the communes adjacent to Tien Yen commune ranges from 38 - 90 million VND/m2 in the third quarter of 2024. Thus, the auctioned land price in the last session is 1-2 times higher than the common price level.
Mr. Pham Duc Toan - General Director of EZ Vietnam Real Estate Joint Stock Company - said that the number of participants is small, so it is unlikely that the price will be pushed up like before. However, compared to the general market level, this price is 20 - 40% higher.
Land auction shows signs of speculation
According to Lao Dong reporters, right after the auction ended, many land brokers quickly sold the plots of land for a difference of 350-500 million VND/plot.
Ms. Nguyen Minh (name changed - Hanoi) said that lot LK02-05 had a winning price of 97.3 million VND/m2 with an area of 137.67m2, equivalent to nearly 13.4 billion VND. Ms. Minh sold the lot for a difference of 350 million VND/lot, raising the value of the land to 13.75 billion VND/lot.
Mr. Nguyen Quoc Anh - real estate expert - said that the recent land auctions on the outskirts of Hanoi show signs of unusual speculation and creating waves. Therefore, the Ministry of Construction has requested to control the increase in land prices after the unusual auctions of land on the outskirts of Hanoi.
Survey data of more than 500 real estate brokers on the above phenomenon also recorded that 38% of brokers said that the unusually high auction land prices were due to FOMO psychology and speculative factors; 21% stated that interest groups were inflating land prices in the suburbs.
Speaking with Lao Dong, Associate Professor Dr. Dinh Trong Thinh - former Head of the Faculty of International Finance, Academy of Finance - commented that the fact that land prices are pushed up higher than the actual price has many potential consequences. This makes it difficult for people to access housing, and at the same time, businesses and the State also face many difficulties in compensating for land due to prices being pushed up higher than the previous price. Therefore, it is necessary to determine the starting price based on the market price, limit project transfers within 5 years and require investors to build houses within 2-3 years.
