Land auctions heat up again
Recently, dozens of land auctions have been continuously taking place in suburban districts of Hanoi such as Thanh Oai, Hoai Duc, Dan Phuong, Me Linh, Phuc Tho, Ba Vi... with thousands of registrations each session and the winning bids were many times higher than the starting price.
Typically, in the auction on October 13 in Quoc Oai, 54 plots of land in Son Trung village, Yen Son commune were put up for auction, with nearly 300 customers and more than 1,000 bids.
Notably, the land auction in Quoc Oai was held overnight, for nearly 20 hours with 12 rounds of bidding. The auction ended at 1:30 a.m. on October 14. The result was that among the 54 plots of land put up for auction, the highest winning price was nearly 54.5 million VND/m2, 4.3 times higher than the starting price, even about 30% higher than the market price.
Previously, in Thanh Oai district, in the auction of 68 land lots in Thanh Cao commune, the winning bid price was up to 100.5 million VND/m2, but 55/68 lots had their deposits withdrawn. The lots with deposits withdrawn had winning bids of 80 million VND/m2 or more, with the highest lot being up to 100.5 million VND/m2. Only 13 lots with winning bids ranging from 51.6 million VND to over 55 million VND/m2 had their deposits paid in full. This shows that although many investors were interested, the prices were beyond the financial capacity of many people.
From recent auctions, it can be seen that land auctions are heating up again. It is expected that from now until the end of October, a series of land auctions will continue to take place in Hanoi in areas such as Ba Vi, Ha Dong, Thuong Tin...
Repeat the situation of pushing prices up and then abandoning deposits?
However, along with the interest of investors and the heating up of the market, the situation of pushing prices up, winning auctions at high prices and then abandoning deposits continues to recur in the auction land market, which has caused many consequences for the market.
In recent years, the real estate market has repeatedly recorded land auction fevers taking place in many localities. Especially in 2021 - 2022, land auctions in some localities such as Bac Giang, Thanh Hoa, Thai Binh, ... were "hot" with auctions recording thousands of participating applications and winning prices many times higher than the starting price, pushing up the land price level around the auctioned land lots.
However, the situation of abandoning deposits on high-priced auction lots continues to occur, and many auctions have had to cancel winning results because investors abandoned their deposits.
At that time, real estate experts repeatedly warned that bidding for land at a price higher than the starting price was one of the tricks of speculators to push up prices to create waves and push up the selling prices of plots in other areas. Most of the auction winners would find buyers to sell the land at a price of 50-200 million VND/plot to make a profit. Those who could not sell immediately were willing to forfeit their deposits because the winning auction price was too high...
When the situation of high auctions and then abandoning deposits continuously occurred, the land fever and the heat of auctioned land also quickly subsided in 2022. By 2023, the land market fell into a gloomy state, and until now this situation has not really improved.
Assessing this situation, economic expert Dinh The Hien said: "High auctions and then forfeiting deposits affect the State's auction policy. Such auctions will become a tool to disrupt and distort the local real estate market. From there, it will have an unhealthy impact on the general economy and the real estate market in particular.
“If there is no drastic action to prevent the practice of paying high prices and then defaulting on deposits, this could continue in future auctions,” the expert warned.
