Ministry of Construction requests Hanoi to handle the act of inflating apartment prices

Specifically, in a recent document, the Ministry of Construction requested the Hanoi People's Committee to inspect and review real estate trading activities of enterprises, investors, real estate trading floors, and real estate brokers in the area, especially in projects and apartment buildings with unusual price increases.

Thereby, there are measures to rectify and handle acts of price inflation, price manipulation, speculation and violations of real estate business laws (if any).

"The Ministry of Construction requests that the Hanoi People's Committee focus on effectively directing the above content and send a report to the Ministry of Construction before April 20," the document stated.

According to the Ministry of Construction, the real estate market has shown signs of improvement. However, recently, the press has reported that in some areas, projects, and apartment buildings, there are apartments and houses with unusually high prices; there are phenomena of price inflation, price manipulation, and speculation.

The Ministry of Construction proposed to handle the act of inflating apartment prices. (Illustration photo: Minh Duc)

PropertyGuru Vietnam's Q1/2024 real estate market report shows that in the first quarter, apartment prices continued to increase. After 6 years, the average price increase of apartments in Hanoi reached 70%.

At the beginning of 2018, the selling price of apartments in Hanoi and Ho Chi Minh City was 27 and 31 million VND/m2, respectively. After 6 years, the average price increase of apartments in Hanoi reached 70%, surpassing Ho Chi Minh City (price increase of 55%).

Mr. Nguyen Quoc Anh, Deputy General Director of PropertyGuru Vietnam, analyzed the main reasons for the sharp increase in apartment prices in Hanoi.

Firstly, the supply of apartments in Hanoi is limited. Although there have been measures to remove legal obstacles for investors, recent new projects only contribute about 20,000 - 30,000 apartments per year, while the normal demand is up to 70,000 - 80,000 apartments/year.

The second reason is that the demand for apartments in Hanoi is still high. Notably, this demand comes not only from Hanoi and the northern provinces but also from the South. Big data from PropertyGuru Vietnam revealed surprising information, the number of real estate seekers from Ho Chi Minh City interested in apartments in Hanoi increased 7.5 times from the first quarter of 2021 to the present. During the same period, the number of searches for apartments in Ho Chi Minh City by people in Ho Chi Minh City increased only 2 times.

Recently, some investors in the Southern market have entered the Northern market. A number of loyal customers from the South of these investors are therefore interested in the projects they have recently developed in Hanoi, contributing to increasing the demand for apartments in Hanoi.

Experts also warn that the Hanoi apartment market is experiencing a "virtual fever" due to signs of individuals and organizations pushing up and inflating prices, making this segment hotter.

Thanh Lam

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