Is the land auction market in Nghe An becoming vibrant again?
After a period of inactivity due to a lack of buyers, several land plots near Vinh City and surrounding districts have resumed auctions and are attracting investors.
Many unsold plots of land have already been sold.
The residential land plots in Kim Trung hamlet (location 3), Nghi An commune (Vinh City), after nine auction announcements (five announcements in 2023 resulting in only one plot sold, and four announcements in 2024 with no buyers), finally sold 31 out of 66 plots on September 23rd.
Mr. Chu Van Mai, Chairman of the Nghi An Commune People's Committee, stated: Due to the high starting land price, the auction unit, IPA International Joint Stock Auction Company, requested the commune to report to the Vinh City People's Committee for consideration of a price reduction. Based on market developments, as well as some other areas, the Vinh City People's Committee agreed to adjust the starting price of the Kim Trung planned area by 10% compared to before, thus creating a boost in the market.
In the first auction in September, the commune put 31 plots up for auction again, and 143 applications were submitted. All 31 plots were sold for a total of over 70 billion VND. The plots were sold at an average increase of 10% compared to the starting price. It is expected that the remaining 35 out of 61 plots in the residential land subdivision plan in Kim Trung hamlet will be put up for auction again on October 4th.
In Quynh Luu district, following some errors and violations in the land auction at the Dong Quan planned area in Quynh Hung commune, the district resolved the issues and reorganized the previously unsold auction areas in September. As a result, 23 land plots were successfully auctioned in the Dong Quan planned area, generating nearly 43 billion VND in revenue, an increase of 8.9 billion VND compared to the starting price.
Mr. Ho Huu Hung, Head of the Justice Department of Quynh Luu District, shared: Due to errors in the land auction in Quynh Hung commune, the auction process in the district had to be temporarily halted for a review of the entire procedure. In 2024, the district did not have many new planned areas put up for auction. However, the results of the auctions for remaining plots were still positive. Specifically, in addition to 23 land plots in Quynh Hung commune, in September, the district put 10 land plots in Quynh Lam commune up for auction, and after 3 rounds, only a few plots remained. Similarly, some of the 62 land plots in the planned auction area of Quynh Giang commune that remained unsold since 2023 were auctioned off after 9 rounds, with the purchase price increasing at a reasonable starting level of 10-13%.
Land prices in suburban areas are rising.
The most active development recently has been the planned area in Hamlet 1, Nghi Phong Commune, Nghi Loc District, where the commune put 114 plots up for auction and received 1,600 applications. As a result, 113 out of 114 plots were sold (one plot is awaiting review due to a complaint). With each plot ranging in size from 180-220m2, after the auction, the lowest price was 1.8 billion VND, the highest was 3.7 billion VND, and the average price per plot was 2-3 billion VND.
Mr. Nguyen Cong Anh, Chairman of the Nghi Phong Commune People's Committee, said: "The commune initially planned 131 plots in this area, but currently only 114 have been put up for sale. The advantage of Nghi Phong commune in general, and the auctioned land plot in Hamlet 1 in particular, is its proximity to the 72m Vinh - Cua Lo road. The commune also has Provincial Road 535, the coastal road, and the national highway running through it, making it very convenient. During the land boom of 2021-2022, many land plots in Nghi Phong commune along the inter-commune road were priced from 15 million VND or 20-25 million VND/m²."2The highest price is 30-35 million VND/m².2.
Mr. Nguyen Thanh Hai, Head of the Finance and Planning Department of Nghi Loc District, said: "The results of the recent auction accurately reflect the district's assessment, and the department also advised the district to closely monitor the auction process to ensure that no errors occur."
The reason this planned area has attracted investors and seen prices increase by around 40% compared to the starting price is because it is a well-planned area with convenient infrastructure connections. The area has a good layout, specifically it's about 300m from Vinh University's second campus, about 1km from National Highway 46, and about 1km from the Vinh-Cua Lo Boulevard. The auctioned land plots are located on both sides of a new 30m wide planned road, which connects to coastal roads and the Vinh-Cua Lo route conveniently. Next year, Nghi Phong commune is expected to be merged into Vinh City according to the Vinh City expansion plan. The fact that many investors are buying land in Nghi Phong commune at this time is also reasonable given their financial resources.
Representatives from the Finance and Planning Department of Nghi Loc district also informed that, in addition to the planned area in Nghi Phong commune, the district will soon have several more planned areas in Nghi Truong and Nghi Trung communes…
Mr. Tran Ngoc Tu, Chairman of the Vinh City People's Committee, said: "According to the plan, the future administrative center of Vinh City will be located on the Vinh - Cua Lo road, near Nghi Duc and Nghi Phong communes. The new Vinh City center will shift to this area, balancing the two urban areas of Vinh and Cua Lo."
This, along with the advantages of transportation such as the North-South Expressway, the newly opened Vinh-Cua Lo road, and the network of feeder roads on both sides of the Vinh-Cua Lo road, makes this prime land area very attractive to real estate investors in the future.
Meanwhile, Mr. Ho Sy Hai, Vice Chairman of the People's Committee of Nam Dan District, stated that land speculation and price manipulation still exist. Recently, in a land auction in Nam Anh commune, the starting price was only 415 million VND, but the winning bid was 3.5 times higher, which is an unusual phenomenon. After winning the auction, many individuals filed complaints and forfeited their deposits, giving unjustified reasons, forcing the district to intervene and resolve the consequences. The district approves prices that are close to market value, and a slight increase in the auction price is reasonable. However, there is a situation in Nam Dan district where organized groups of several dozen people manipulate prices, appearing at every lot to inflate the bidding price beyond the actual market value.
Mr. Ho Sy Hai also stated that: Land in Nam Dan is currently attractive to investors because of its good prices compared to other localities such as Vinh City. Nam Dan now has a beautiful and spacious northern ring road, making transportation convenient. In addition, the previously low-priced Yen Xuan flood-prone area now has a new Yen Xuan bridge and the Nam 5 flood bypass road, which has boosted the real estate market in the area.
Returning to Nghi Loc district, at the auction held on the afternoon of September 24th in the planned area of Hamlet 1, Nghi Phong commune, out of 113 auctioned lots, two investors from outside the district each won 15 lots; and one investor from Vinh City won 12 lots. This reduces the opportunities for local people who genuinely need land for housing.
Mr. Nguyen Trung Long, Head of the Pricing Department of the Department of Finance, stated: The starting price for auctioning land use rights in the districts is currently approved by the districts themselves. Therefore, it needs to be set closer to market value and subject to price control measures. The starting price for auctioning land use rights is based on Articles 156 and 160 of the 2024 Land Law...
Nguyen Hai - Tran Chau
