Land auctions in the outskirts of Hanoi are gradually cooling down.

In just 2-3 months, the winning bid prices for many auctioned land plots in the outskirts of Hanoi have dropped by 20-50%. Areas that were once hotspots for investors, such as Hoai Duc, Thanh Oai, and Phuc Tho, are gradually cooling down.

In just 2-3 months, the winning bid prices for many auctioned land plots in the outskirts of Hanoi have dropped by 20-50%. Areas that were once hotspots for investors, such as Hoai Duc, Thanh Oai, and Phuc Tho, are gradually cooling down.

The image shows participants in the land auction leaving the hall after the session ended. Photo: Thanh Vu.

A simultaneous decrease

Gone are the all-night auctions and record-breaking figures; land auctions in the outskirts of Hanoi in November 2024 have gradually cooled down. This is clearly reflected in the number of applicants and the winning bids for the land plots.

Previously, in August 2024, the public was abuzz with excitement over the auction of 19 land plots LK03 and LK04 in the Long Khuc area, Tien Yen commune, Hoai Duc district. The image of over 400 people intensely competing until 4 am during this auction was unprecedented.

What was even more shocking was the unprecedented winning bid price, with the highest reaching 133.3 million VND/m2. The remaining plots also had exorbitant winning bid prices, ranging from 97.3 to 121.3 million VND/m2. Even the plot with the lowest winning bid reached 91.3 million VND/m2.

However, just three months later, the appeal of land auctions in Long Khuc area, Hoai Duc district, had diminished. On November 4th, the auction of 20 land plots in lots LK01 and LK02 recorded an average winning price of only 91-97 million VND/m2. The highest price was 103.3 million VND/m2; the lowest was 85 million VND/m2. The number of participants in this auction also decreased sharply, from 400 to approximately 140.

With fewer participants, the level of competition decreases, preventing the winning bid from being driven up too high.

A similar downturn occurred in the auction of 32 land plots LK05 and LK06 on November 11th. Despite these plots being in relatively good locations in the Long Khuc area, investor interest significantly decreased. The number of participants dropped to around 120 people. Many plots were won at only 79.3 million VND/m2 – a price never before seen in the two previous auctions.

Besides Hoai Duc, another district labeled as having "inflated land prices" is Thanh Oai. In August 2024, an auction of 68 land plots in Ngo Ba area, Thanh Than village, Thanh Cao commune, attracted 4,600 applications. Notably, the highest winning bid reached 100.5 million VND/m2; the lowest was 51.6 million VND/m2.

However, similar to the scenario in Hoai Duc, the recent auction in Thanh Oai witnessed a different situation. No longer exceeding 100 million dong, the 25 land plots in Do Dong commune only recorded a highest winning bid of 90.3 million dong/m2; the lowest was 45.3 million dong/m2. Furthermore, the number of applications decreased by 11 times, down to only 400.

While Hoai Duc and Thanh Oai districts recorded a 10-20% drop in winning bids after 3 months, land auctions in Phuc Tho district saw a decline of up to 50% in just 2 months. In September 2024, the auction of 13 land plots in the Doc Tranh area (Trach My Loc commune) had the highest winning bid reaching 75 million VND/m2. 100 people participated in the auction.

However, these "sky-high" figures soon came back down to earth. Also in the Doc Tranh area, the auction of 12 land plots on November 11th yielded vastly different results. The highest winning bid dropped to 37.6 million VND/m2. The number of investors bidding in the hall also dwindled to a mere 32.

Why did the price drop?

Speaking to a reporter from the Investment Newspaper, Mr. TN, a former land auction participant in Hoai Duc district, said that he and others felt bewildered by the new market prices. Since the beginning of the year, land prices in Tien Yen commune (Hoai Duc district) have nearly doubled. This isn't just limited to auctioned land; even residential plots have reached 100 million VND/m2.

"If you bid too low, you won't win the bid; if you bid too high, it's hard to find a buyer. I still have a corner plot in the Long Khuc area, the winning bid was 121 million VND/m2, and even with a 300 million VND markup, I still can't find a buyer," Mr. TN said.

The excessively high land prices will affect liquidity. If they can't find buyers, the groups will have to forfeit their deposits, amounting to around 150-250 million VND per plot. Typically, in each auction, these groups will try to secure one or two plots of land or more. Furthermore, they often participate in auctions in multiple different areas simultaneously. If they forfeit their deposits in every auction, the financial loss will be significant.

"To ensure that the land plots are easily sold, many groups are hesitant to bid high prices. In the Long Khuc area, only plots priced below 85 million VND/m2 are easy to sell. This is why many participants in the two recent auctions left one after another when they saw the price climb to 90-100 million VND/m2," TN shared.

Explaining the low number of applications at recent auctions, a wealthy individual who previously won four land plots in Hoai Duc suggested that the groups had invested too much money in previous auctions and now lacked the financial resources to participate again.

"With fewer participants, the level of competition decreases, preventing the winning bid from being pushed up too high," the person added.

Source: https://baodautu.vn/batdongsan/dat-dau-gia-vung-ven-ha-noi-dan-ha-nhiet-d230564.html