Apartment prices increase by billions of dong, the dream of home ownership for low-income people is getting further away

Over the past year, apartment prices in Hanoi have recorded an increase of VND 400 million to VND 1 billion per apartment, depending on the area and size, compared to 2022 and earlier.

According to real estate experts, although the real estate market is still facing many difficulties, apartments are a bright spot when people with real housing needs are interested. The high demand is causing the prices of old apartments to increase day by day and establish a new price level.

A survey by VTC News on the morning of March 31 showed that the price of apartments at the Ros Town project, 79 Ngoc Hoi, Hoang Mai, Hanoi ranges from 53 - 58 million VND/m2, with basic furniture including bathroom equipment and sinks.

Specifically, a 104m2 apartment with 3 bedrooms on the 15th floor facing the main door to the Southeast costs VND 5 billion 879 million, equivalent to VND 56.2 million/m2; an 89m2 apartment on the 26th floor facing the main door to the Northwest costs VND 4.8 billion, equivalent to VND 54 million/m2. This price has increased by about VND 800 million/apartment compared to the beginning of 2023.

At the Goldseason project, a project located at the junction of Nguyen Trai and Le Van Luong streets, 2-bedroom apartments with an area of 68 - 90m2 increased from 2.8 - 3.3 billion VND/apartment to 3.9 - 4.2 billion VND/apartment, an increase of 700 - 900 million VND/apartment compared to more than 1 year ago.

Rising apartment prices are pushing low-income earners further away from their dream of owning their own home. (Illustration: Lao Dong Newspaper).

Meanwhile, apartment prices at projects in the Vinhomes Smart City complex have also recorded an increase from 500 million to billion VND/apartment after just over a year.

To buy a small apartment with an area of 30m2 here, customers must prepare about 1.8 billion VND. Meanwhile, apartments with an area of 45m2 are also being offered for sale at prices ranging from 2.5 to 2.7 billion VND. For apartments with an area of 60m2 or more, the common selling price is from 3.1 to 6.5 billion VND.

Apartment prices have been continuously increasing sharply, surprising many buyers. “I just surveyed the investor’s price list and the price increase is terrifying,” said Ms. Nguyen Thi Minh Huyen (Hoang Mai, Hanoi).

High apartment prices have forced many people to postpone their plans to find a place to live in the capital.

Nguyen Hai Binh, a young lecturer at a university, said that with the accumulated amount of 1.5 billion VND, he has recently searched for an apartment outside the central districts of Hanoi. However, due to the scarcity of new apartments for sale, the selling price has been continuously pushed up to a level beyond his ability.

“I had to put aside my dream of buying an apartment with 1.5 billion VND. Now if I want to buy an apartment, I will have to borrow at least 1.5 billion more to be able to buy an apartment of about 70 square meters. I choose to continue renting a house to live in until I get married,” said Mr. Binh.

According to statistics from a real estate website, the average selling price of apartments in Hanoi in the first 3 months of the year is "escalating", increasing by up to 17% compared to the same period in 2023, in which many projects increased in price by over 20% after only 1 year.

Accordingly, the selling price of affordable apartments is about 35-50 million VND/m2; the selling price of luxury apartments is over 50 million VND/m2, commonly at 60-70 million VND/m2. For example, in the western area of Hanoi, there is a project that has announced the cheapest price of 66 million VND/m2, excluding VAT.

Mr. Nguyen Van Dinh, Chairman of the Vietnam Association of Realtors (VARS), said that the reason for the high price of apartments is because the market has too little supply while the demand for this segment is very high.

Another reason given by Mr. Dinh is that the delay in legal procedures has caused a sharp decrease in product supply and very few projects are eligible for sale. The products that are likely to be sold are mostly in the high-end and luxury segments. Therefore, the selling price is also mostly high.

Another reason why apartment prices are high is because investment and construction costs have increased due to the rising prices of input materials, labor, and financial access costs. Low interest rates and record high inflation in the past period are also factors contributing to the sharp increase in housing prices.

"High apartment prices make it increasingly difficult for people to buy apartments when the real demand for housing is increasing, there are no new projects and people's income is limited. This is really difficult for people with low incomes. In the future, apartment projects will continue to increase in price due to scarcity, and at the same time, investors must optimize profits when costs are pushed up," said Mr. Dinh.

In order to find solutions to overcome difficulties and cool down apartment prices, the Prime Minister has assigned the Ministry of Construction to direct and guide real estate enterprises to restructure segments and reduce product prices. At the same time, the Ministry of Construction needs to have appropriate, timely and effective solutions to restructure segments for people with real needs, social housing, housing for workers and low-income people.

PHAM DUY

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