The land market in the suburbs of Hanoi is recording remarkable signs of improvement. Real estate market data for the third quarter of 2024 from Batdongsan.com.vn shows that the land market has significantly improved in terms of interest and transactions.
However, this is still only a local improvement in some areas, especially the northern provinces.
Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn said that up to now compared to the first quarter of 2023, Hoai Duc land has increased by 81%, from the average market price of 55 million VND/m2 to 100 million VND/m2.
Land prices in Dong Anh increased by 53%, from an average price of 41 million VND/m2 to 63 million VND/m2. Land prices in Thanh Oai increased by 90%, from an average price of 21 million VND/m2 to 40 million VND/m2.
Notably, in the third quarter of 2024 alone, land auctions on the outskirts of Hanoi with winning prices dozens of times higher than the starting price showed signs of abnormality.
Regarding this abnormality, survey data of more than 500 real estate brokers conducted by Batdongsan.com.vn recorded that 38% of brokers said that the unusually high auction prices were due to FOMO and speculation. In addition, 29% said that changes in the law had pushed up prices, and 21% said that interest groups were inflating land prices in the suburbs.
According to Ms. Pham Thi Mien - Deputy Director of the Institute of Vietnam Real Estate Market Research and Assessment (VARS), speculation and price inflation through auctions are also one of the reasons for the high real estate prices. These individuals take advantage of the auction deposits to inflate the prices of related land plots. The consequence of these situations is that real estate prices, which are already high, are now increasing even more.
Dr. Tran Xuan Luong said that in order to prevent speculation and land price inflation through auctions, additional measures are needed, such as establishing an independent Land Auction Supervision Council, and applying and establishing additional policies on ceiling and floor prices. In case the floor and ceiling prices exceed the threshold, the auction will be canceled.
"There needs to be additional administrative regulations such as publicizing the purpose of purchase. If it is for living, it is necessary to provide declaration documents in the auction file such as proof of work, house construction plan, living plan, proof of source of funds to prevent money laundering. State management agencies need to issue more appropriate policies and decrees, closer to reality, only then can the real estate market stabilize," said Mr. Luong.
The Hanoi People's Committee has just sent a document to departments, branches, districts, towns and cities regarding the auction of land use rights. Accordingly, the Hanoi People's Committee requested the district-level People's Committees to make a list of cases where people paid higher prices than the market price to win the auction but did not pay according to regulations, causing market disruption.
This list will be made public on the websites of the districts and the Department of Natural Resources and Environment. In addition, Hanoi City has directed units to continue to improve regulations, including limiting the organization of auctions to allocate land to individuals for self-construction of houses.
At the same time, instruct the People's Committees of districts and towns to take measures to prevent violations of auction regulations from continuing to participate in auctions.
