Land auctions on the outskirts of Hanoi cool down: Are buyers 'waking up' or is it a new speculative trick?

On November 23, the auction of 25 land lots in Thanh Oai district ( Hanoi ) ended after 11 rounds. The land lot with the highest winning price reached 75.3 million VND/m2, more than 14 times the starting price. This price is much lower than the session on August 10 - at that time, the highest winning price was 133 million VND/m2. The auction attracted 97 customers with 413 participating applications, also less than the number of 4,600 applications submitted and 4,201 qualified applications of 1,545 people at the session on August 10.

Previously, on November 16, 25 plots of land also in Thanh Oai were auctioned, with the highest winning price being over 90 million VND/m2. This session only attracted over 400 applications from 111 customers. Thus, it can be seen that the winning bid price has decreased significantly.

Similarly, in Hoai Duc district, the auction price also decreased by about 20% compared to the peak period. Specifically, the highest winning price of the first two auctions in November 2024 was 103 and 109 million VND/m2, respectively, while the highest winning price of the August session was up to 133 million VND/m2.

Or in Phuc Tho district, in the recent auction, the highest winning price was only 37.6 million VND/m2, while 2 months ago, some plots here were up to 75 million VND/m2.

Land auctions on the outskirts of Hanoi have cooled down in many places. (Illustration photo: Minh Duc).

Not only did the winning prices drop, but the number of participants in these auctions also dropped significantly.

In Hoai Duc district, if the first land auction on August 19 had 500 participants and 1,500 sets of documents, then by the sessions on November 4 and 11, there were only more than 100 participants.

Similarly, in Thanh Oai district, the land auction on November 16 attracted only 111 people and 400 sets of auction documents, a decrease of more than 90% compared to the record auction on August 10 when it attracted 1,500 participants and 4,000 sets of documents. On November 23, the auction attracted only 97 customers with 413 participating documents.

In Phuc Tho district, the number of participants dropped sharply when only 32 investors registered with more than 120 applications. Previously, the auction on September 17 here had more than 100 attendees.

Commenting on the cooling down of land auctions, Mr. Pham Duc Toan, CEO of EZ Propert, analyzed that land prices in previous auctions were pushed too high. However, when the price far exceeds the real value, liquidity becomes a big problem. Auction winners find it difficult to resell because they cannot find buyers, especially in the context of high bank loan interest rates and the real estate market facing challenges in capital sources.

" Poor liquidity may be the direct reason why recent auction prices are gradually cooling down ," said Mr. Toan.

According to Mr. Toan, recent auctions have seen a sharp decrease in the number of applications and winning prices, possibly because buyers have "woke up" after the dizzying price increases.

" Some investors are no longer interested in paying too high a price to buy a plot of land and then sell it for a profit. They all see that the current price is too unrealistic. If they cannot find a buyer within a month, they will have to forfeit their deposit. The lesson of the Thanh Oai district land auction last August has affected the psychology of investors. Therefore, they have become more cautious ," Mr. Toan analyzed.

In addition, Mr. Toan said that the suburban areas of Hanoi such as Hoai Duc, Thanh Oai or Phuc Tho all have uneven infrastructure development. These areas may be attractive in the short term, but the land prices being pushed up too high will not match the actual purchasing power of the market, leading to a prolonged situation of "holding land and waiting for the right time", reducing the attractiveness of auctioned land.

Another reason Mr. Toan gave was that the land brokers, who were holding on to lots of land that were not liquidated, lost their deposits, so their financial funds were gradually depleted.

Meanwhile, Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, said that it is very possible that the "cooling down" situation is also a new trick of speculators and brokers.

" The recent decrease in auction prices may be due to the tricks of land brokers to create a psychological effect on the market. Large brokerage or speculator groups often deliberately participate less or lower the winning prices to create the feeling that land prices are "cooling down".

This trick could be to force small investors to sell off previously purchased plots of land at "good" prices or to make real buyers feel that this is a good opportunity to participate ," Mr. Dinh commented.

Accordingly, land traders do not hesitate to use tricks such as spreading news of price reductions, arranging auctions or even making fake deposits to manipulate participants' psychology. Once land prices have been pushed down to a low level, these groups will collect goods at cheap prices and wait for the opportunity to push prices back up when the market improves. Not only that, deliberately not inflating the winning auction price will also help to get rid of inventory faster.

To stabilize the auction land market, according to experts, the State needs to control starting prices and ensure a more transparent auction mechanism, limiting the situation of land brokers pushing up prices, causing market disruption.

Mr. Nguyen Quoc Hiep - Chairman of the Vietnam Association of Construction Contractors - said that to prevent speculation in land auctions, it is necessary to increase the starting price and deposit rate in auctions, determine the starting price close to the market price, limit transfers within 5 years and require construction within 2-3 years, shorten the time to pay money after winning the auction...

Chau Anh

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