It is expected that on November 11, Hoai Duc district will continue to auction 32 plots of land (LK05 and LK06) also in the Long Khuc field area, Tien Yen commune. The plots of land have an area of 97 - 172m2; the deposit for each plot ranges from 142 - 251 million VND. The starting price is 7.3 million VND/m2.
Thanh Oai district, one of the areas with the most active land auctions last August, is also preparing to put plots of land up for auction. On November 16, Thanh Oai district will auction 25 plots of land in Van Quan village (Do Dong commune). The plots range in size from nearly 84 square meters to over 143 square meters. The starting price is VND5.3 million/square meter, equivalent to a deposit of VND88-151 million/plot.
Mr. Nguyen Van Dinh - Vice President of Vietnam Real Estate Association - predicted that land auctions in Hanoi will continue to receive attention and land prices at auctions will continue to increase because the demand for real estate, especially products with legal guarantees and clear growth potential, such as auctioned land, is very large.
In fact, in areas such as Hoai Duc, Ha Dong, Thanh Oai, the potential for urban development along with infrastructure development creates great expectations for investors. Many investors are willing to pay high prices to own these limited-quantity products, even though the price may far exceed the actual value of the land. At the same time, with the expectation that land prices will continue to increase in the future, buyers may accept prices much higher than the usual valuation.
In particular, the high price increase is due to the fact that the Hanoi real estate market is growing "hotly" with limited supply, the primary price continuously sets a new high level along with expectations about the expansion of the city and traffic infrastructure.
Ms. Pham Thi Mien - Deputy Director of the Vietnam Real Estate Market Research and Evaluation Institute - said that although land prices in the suburbs of Hanoi tend to increase and are still "not cooling down", it is necessary to be careful when investing through land auction channels.
Nowadays, when seeing real estate prices maintain an upward trend for a long enough period of time, many investors follow the FOMO mentality (fear of being left behind). Accordingly, investors will expect prices to continue to increase, then make risky decisions. As a result, many investors have their capital tied up, creating abandoned land, negatively affecting the recovery process, developing in a safe, healthy, and sustainable direction of the real estate market.
Besides, it also affects the socio-economic development of the locality in particular and the whole country in general when the cash flow is stagnant in land and does not go into other economic activities.
Mr. Le Dinh Chung - General Director of SGO Home - said that when investors spend money to buy land at the present time, they need to have a medium-term vision, with a capital recovery period of at least 1 - 3 years, instead of expecting to invest "surfing" on infrastructure and projects.
Investors still need to be cautious, avoid getting caught up in infrastructure planning information and virtual land fever in the context of the real estate market still in the recovery phase. In some places, there is even a phenomenon of groundless land price increases.
