Winning price far exceeds starting price
According to Lao Dong Newspaper, after recent land use rights auctions in Dong Hoi City (Quang Binh Province), land prices in many areas have increased rapidly.
The auction was organized by Truong Ha Joint Stock Auction Company in coordination with the Management Board of Construction Investment Projects and Land Fund Development of Dong Hoi City on June 13, attracting more than 300 participants, with more than 700 documents.
There are 36 plots of land in Hai Thanh ward, Bac Nghia and Bao Ninh commune being auctioned, with areas ranging from nearly 95m2 to over 337m2, starting prices ranging from 568 million to over 6.7 billion VND/plot.
Many plots are closed at prices 3-4 times higher than the starting price. A typical example is plot No. 131 in Hai Thanh ward, 140m2 wide, starting at 872 million VND, which was closed at more than 3.8 billion VND, an increase of more than 4.4 times. Similarly, plot No. 137 with an area of 164m2 with a starting price of about 1 billion VND has been closed at 3.45 billion VND, an increase of over 3.3 times.
The auction list also shows that plots of land with large areas and beautiful locations recorded a difference of 1.5 billion to more than 3 billion VND between the starting price and the winning price. Many auction winners immediately resold on social networks, creating a familiar "surfing" roundabout that appeared during the land fever 5-6 years ago.
Talking to reporters, a resident participating in the auction said that he thought that if the economy was in difficulty, prices would decrease, but who would have thought that there would still be people "holding" dozens of plots of land at once. People with real needs are unlikely to get in.
The biggest concern is that land prices being pushed too high will create a virtual price level for the local real estate market.
In statistics from the auction of land plots in TDP 10, Bac Ly ward (Dong Hoi city), the total starting value is more than 33 billion VND, the total winning price is more than 52 billion VND, a difference of nearly 19 billion VND. Many plots of land increased by more than 800 million VND after only a few bids, with some plots increasing by more than 1 billion VND.
A similar situation also occurred at the auction of land plots in Bac Ly ward and Duc Ninh commune (Dong Hoi city). Some people have won 6-7 consecutive plots of land in this area, each plot worth from 1.5 to 2.7 billion VND. Of the 24 plots of land, 19 plots recorded a difference of hundreds of millions to more than 1 billion VND.
Concerns about land bubbles
Information collected by Lao Dong Newspaper shows that in the last 2 auctions, one person won more than 20 plots of land with a total value of tens of billions of VND. The appearance of these "big investors" is causing a stir in the local market.
Ms. Xuan Dieu (in Dong Hoi City) said that the increase in land prices is not well controlled, easily leading to speculation and hoarding.
A person in the auction industry in Quang Binh said that the phenomenon of winning prices far exceeding the starting price once occurred around 2019-2020, when the real estate market in Dong Hoi City was "hot" every day. At that time, there were also many plots of land auctioned 3-4 times higher than the starting price, attracting the attention of many investors.
However, after a short fever, the market quickly calmed down again, many landlords had to sell at a loss.
"We have seen many investors competing for land, and then they themselves are stuck when they cannot sell or prices have dropped. Therefore, the current sharp increase in land prices after auctions needs to be viewed cautiously, avoiding the crowd effect," this person shared.
Regarding the above issue, the leader of the People's Committee of Quang Binh province said that the authorities are carefully reviewing cases of high land prices after auctions, reviewing whether these people are speculating or inflating prices or not.
