In late 2024, 26 land plots belonging to LK2 and LK6 blocks in Yen Quan Hamlet in Tan Phu commune in Quoc Oai district were successfully auctioned. While the starting price was just VND4.7 million per sq m, the highest winning price reached VND76.7 million per sq m, or 16 times higher than the starting price, while the lowest winning price was VND40.7 million, or 8.7 times higher.

The winning prices demonstrated sharp fall in prices compared with the previous auction, where land plots in DG31/2019 block in the same locality were for sale in late November. The sharpest decrease was VND18 million per sq m, or 20 percent.

Prior to that, the auction of 20 land plots witnessed the highest winning price at VND95 million and the lowest at VND71 million per sq m.

In August and September 2024, land auctions in suburban districts of Hanoi attracted hundreds of attendees. There were auctions with more than 1,000 registrations. The land in the suburbs was then a ‘hot spot’ with auction winning prices making new records. The price of VND100 million per sq m was offered for many land plots. However, more recent auctions have cooled down.

Analysts noted that the prices have decreased following the state management agencies’ actions. The number of participants and registrations has decreased significantly.

The auction of 12 land plots in Trach My Loc commune in Phuc Tho district in November, for example, attracted only 120 dossiers and 32 clients, a sharp decrease compared with the auction held in August.

The winning prices at the auction were surprisingly low. All the seven land plots in Doc Tranh area were sold, but the highest winning price was just VND37.6 million per sqm, and the lowest VND28.8 million, just 20 percent higher than starting price.

Meanwhile, at auctions in the same locality before, the winning prices were sky high, surging from VND60 million to VND69.8 million and then VND75 million at the auction in mid-September.

The land prices have also decreased in Hoai Duc and Thanh Oai districts, with many auction participants giving up, accepting to lose their deposits. 

At the auction in November 2024 in Thanh Oai, the highest winning price was VND75 million per sq m, down 20 percent compared with the previous auction in the same locality. The decrease was even higher, VND100 million per sq m, or 35 percent, if compared with the prices at August auction.

Land price adjustments rescue land auctions

In early December 2024, the Prime Minister urged ministries and localities to rectify land auctions following signs of land prices ballooning. Local authorities in some areas had to postpone land auctions to examine the legal status.

Real estate legal expert Nguyen Van Dinh believes that adjusting land prices is a crucial solution to land-use right auctions.

In Hanoi and other localities, people tend to bid sky-high prices at land auctions, accepting to lose deposit money as they give up the deals. This is because Article 159 of the 2024 Land Law says that starting prices for land auctions are determined in reference with the official land price framework set by agencies.

As the Hanoi official land prices were fixed at very low levels, much lower than market prices, the starting prices were unreasonably low, while the winning prices were tens of times higher.

The auction in Soc Son district once stirred up the public when people bid VND30 billion per sq m, while the starting price was just VND2-3 million. Participants at the auctions competed with each other and pushed prices up, fostering bidding wars and disruption attempts.

The Ministry of Natural Resources and Environment (MONRE) has issued directives, requesting local authorities to soon update land price frameworks and to align prices with market prices. 

HCM City and Hanoi have set up new land price frameworks, with price levels coming closer to market prices. This allows local authorities to set higher starting prices, so people will have to think carefully before bidding prices.

“If so, auctions will be more professional and healthier, and won’t be chaotic as seen recently,” Dinh said.

In the latest news, Hanoi People’s Committee has approved the plan to use land in Cau Giay district in 2025. Twenty two projects will be implemented, covering a total area of 28.36 hectares. 

Hong Khanh