Auctioned land prices in Hanoi’s suburban areas have plummeted, with winning bids at Tan Phu Commune, Quoc Oai District, falling by as much as 20% in December 2024 compared to November. This marks a sharp decline in a previously overheated market.

In late December, 26 land lots in Yen Quan Village, Tan Phu Commune, were successfully auctioned. Starting at VND 4.7 million per square meter, the highest winning bid reached VND 76.7 million per square meter - 16 times the starting price.

This figure, however, is VND 18 million lower than the peak price of VND 95 million recorded in a November auction in the same area.

Cooling trends in suburban land auctions

The slowdown is evident across Hanoi’s suburban districts. For instance, in Phuc Tho District, auctions in November saw a significant drop in participation.

A total of 120 applications were received for 12 lots across various areas, including Doc Tranh and Tich Giang. This is a stark contrast to auctions in August and September, which often drew hundreds of participants.

Prices have also fallen notably. In Dộc Tranh, the highest winning bid in November was VND 37.6 million per square meter, far below the record highs of VND 75 million in September.

The situation is similar in Hoai Duc and Thanh Oai, once considered "hotspots" for land auctions. In Thanh Oai, winning bids in November peaked at VND 75 million per square meter - a 20% decline from the previous week and a 35% drop from the August record of over VND 100 million per square meter.

Government intervention and policy adjustments

In response to market volatility, the government has intensified efforts to regulate land auctions. Prime Ministerial directives in December 2024 emphasized the need for stricter oversight to curb price manipulation and market distortions.

Several localities, including Hanoi, temporarily suspended land auctions to review legal frameworks and address irregularities. Experts believe adjusting land price frameworks will bring greater stability to the market.

Real estate legal expert Nguyen Van Dinh stated that adjustments to land price frameworks will help make auctions more transparent and fair. He noted that the current system, which bases starting bids on outdated land price tables, often sets artificially low starting prices.

For example, in some auctions in Soc Son District, starting prices were as low as VND 2–3 million per square meter, leading to excessively high bids of up to VND 30 billion per square meter. Such practices encouraged speculative behavior, with participants willing to lose their deposits to manipulate auction outcomes.

“Updating land price tables to align with market values and increasing deposit requirements will make participants more cautious, leading to healthier and more professional auctions,” Dinh explained.

Cities like Hanoi and Ho Chi Minh City have already introduced revised land price tables with significant increases, narrowing the gap between starting bids and market values. These changes aim to deter speculative bidding and foster a more orderly auction process.

Hong Khanh