Brian Jeffrey
In Hanoi’s outskirts, land auction prices have significantly dropped, with winning bids in Tan Phu Commune, Quoc Oai District, decreasing by up to 20% in December 2024 compared to the previous month. This downturn marks a stark contrast to the previously heated market conditions.
In late December, 26 plots were auctioned in Yen Quan Village, Tan Phu Commune. These began at VND 4.7 million per square meter, with the highest bid reaching VND 76.7 million per square meter, which is 16 times the initial offer.
Notably, this highest bid is VND 18 million less than the peak price of VND 95 million noted in November’s auctions for the same area.
Decline in suburban land auction activity
This reduction in auction engagement is clear in Hanoi’s surrounding districts. For example, Phuc Tho District experienced a notable decrease in participation during the November auctions.
Only 120 applications were submitted for 12 lots across various locations like Doc Tranh and Tich Giang, a stark decrease compared to the hundreds of bidders seen in August and September.
Price reductions are evident too. In Dộc Tranh, the highest winning bid in November dropped to VND 37.6 million per square meter, substantially lower than the VND 75 million peak in September.
Similar trends have been observed in Hoai Duc and Thanh Oai, which were previously viewed as “hotspots” for land sales. In Thanh Oai, the highest winning bid in November reached VND 75 million per square meter—a 20% decrease from the prior week and a 35% plunge from the August record of over VND 100 million per square meter.
Government actions and policy changes
To address market instability, the government has stepped up land auction regulations. In December 2024, directives from the Prime Minister highlighted the necessity for stringent oversight to prevent price manipulation and market inequities.
Several areas, including Hanoi, have put a temporary halt to land auctions for legal assessments and to rectify discrepancies. Analysts suggest that reforming land price structures is essential for market stability.
Real estate legal analyst Nguyen Van Dinh mentioned that updating land pricing structures would enhance auction transparency and fairness. Currently, the outdated pricing tables lead to unrealistically low starting prices, fostering speculation.
For instance, in some Soc Son District auctions, starting prices were recorded as low as VND 2–3 million per square meter, resulting in exaggerated bids soaring to VND 30 billion per square meter. Such practices promote speculative bidding, where bidders might forego their deposits to sway outcomes.
“Aligning land price tables with current market values and raising deposit amounts will encourage more responsible bidding, thereby cultivating healthier auction practices,” Dinh noted.
Cities such as Hanoi and Ho Chi Minh City have already implemented updated land price tables with significant hikes, effectively lessening the disparity between starting bids and actual market values, which aims to curb speculative bidding and regulate the auction process more effectively.
Hong Khanh
