Apartment prices have increased sharply in recent times.
In a report on the real estate market in 2024, the Ministry of Construction said that in large cities, apartment prices will increase much higher than in 2023.
A new price level has been established for all segments. Specifically, the low-end segment, which previously cost less than VND30 million/m2, has now increased to VND45 million/m2. The mid-range segment, which previously costed VND30-45 million/m2, has now increased to VND45-70 million/m2. The high-end segment, which previously costed VND50-70 million/m2, has now increased to VND70-100 million/m2. The super-luxury segment has appeared on the market in a few projects with prices above VND200 million/m2.
The Ministry of Construction said that in 2024, apartment prices in some major cities will continue to increase. In Hanoi, apartment prices will increase by 40-50% compared to 2023, with some projects increasing at a higher rate.
According to a survey by Dan Tri reporters, in the Hanoi market, apartments such as Ecolife Tay Ho have a selling price of about 72 million VND/m2; Sunshine Garden has a selling price of about 54 million VND/m2; Chelsea Park - Cau Giay has a selling price of about 62 million VND/m2; Trang An Complex has a selling price of about 70 million VND/m2; Legend Tower has a selling price of about 72 million VND/m2. The above prices have increased significantly compared to the beginning of 2024.
An apartment building in Hanoi (Photo: Tran Khang).
Real estate expert Nguyen Quoc Anh said that there are many reasons leading to the feverish price increase of the apartment segment in recent times.
First, the real estate market is cyclical. Specifically, apartment prices are increasing due to the nature of the market being in the recovery phase. Previously, in mid-2024, this unit predicted the recovery of each type of real estate, in which the first type to recover will be residential products.
After going through a difficult period, the psychology of investors in the real estate market is very weak. The most fearful thing when investing is not the decrease in real estate prices but the fear of the product being illiquid. Therefore, investors are now looking for types of properties with certain legal status, cash flow, and at least can be rented out like apartments.
The second reason is that supply has not met market demand, while demand is very large. For example, in Hanoi, each year about 100,000-170,000 new apartments are needed, while the supply in 2024 will only meet about 30,000 units, and in 2023 about 10,000 units.
In addition, real estate products are increasingly concentrated in high-priced segments. Evidence is that in early 2020, the high-end segment and above (priced above VND55 million/m2) only accounted for about 6% of total supply. By the third quarter of 2024, these products accounted for about 60%.
According to him, in the context of low supply in the market, after removing legal issues and launching products, investors mainly focus on the mid-range segment and above (prices above 35 million VND/m2). "It takes a long time to launch a project, while land prices continue to increase every day, so it is logical for investors to decide to launch apartments with prices from mid-range and above," said Mr. Quoc Anh.
The third reason is the psychological factor of the market. Specifically, when the price of apartments has not increased much, people tend to wait for the price to decrease. But when they see the price increase by about 10-20%, everyone rushes to buy because they are afraid that the price will continue to increase. This adds a psychological blow, causing the market to rebound.
"In fact, the market has been very hot for the past year. Thus, the reason also comes from the fact that people are quite impatient after waiting for apartment prices to drop," Mr. Quoc Anh concluded.
Ms. Nguyen Thi Hong Van, another real estate expert, said that real estate prices in Hanoi are still growing mechanically due to natural factors such as demand, improved income, population growth, and urbanization. However, a sudden increase in the near future is unlikely.
According to her, the reason for the previous increase in Hanoi real estate prices was mainly due to speculative buying and selling activities. These subjects now have to consider more carefully when participating in the market, when the increase in real estate prices must be higher than the cost of capital, the cost of using financial leverage as well as the cost of income tax from real estate transfers calculated on the new land price list closer to the market.
Apartment prices continue to increase this year?
Mr. Vu Cuong Quyet - CEO of Dat Xanh Mien Bac - stated that the apartment segment in Hanoi in 2024 will have strong price fluctuations. There are apartments that have increased in price by 40-50%, even 60% compared to 2023. Compared to the price in 2023, apartment prices have increased significantly. Secondly, new projects are also set by investors with new prices. New projects are all at 70-90 million VND/m2, even 110-120 million VND/m2.
Experts say that this year the supply of low-cost apartments will improve (Illustration: Tran Khang).
"I think the current apartment prices have reached a threshold and it is difficult to increase further. Because if they increase further, it will be beyond people's purchasing power and cause liquidity difficulties. But it is also very difficult to reduce prices because the current costs to implement a project are very high from capital costs, interest rates, construction material costs and especially land use costs currently assessed at market prices," he said.
Commenting on the apartment trend this year, Mr. Quyet said that apartment prices will stabilize in the Ho Chi Minh City and Hanoi markets. However, this year, apartment prices in the provinces, especially industrially developed provinces, will have a breakthrough in liquidity because prices are quite reasonable in the provinces.
Mr. Nguyen Anh Que, a real estate expert, said that in the period of 2020-2024, the supply of apartments is limited due to many difficulties in investment procedures, leading to sharp price increases. However, everything has a cycle and the law of supply and demand, so when prices increase too high, the market will adjust.
According to him, Hanoi apartment prices peaked in October 2024, both in terms of transaction volume and selling price. Since November 2024, the market has shown signs of reversal, investors have begun to reduce prices, transaction volume has decreased, and confidence in continued increases in apartment prices has almost disappeared.
By 2025, investment procedures have been improved, the supply of apartments has increased, including social housing. With a new supply of about 10,000 units in areas such as Dong Anh, Me Linh, Thanh Tri, Nam Tu Liem and some other districts, people will have more choices.
Therefore, this year, the selling price of new commercial apartments is expected to decrease by 5-10% compared to 2024. By 2026, the decrease could reach 10-15%, and the peak of new supply in 2027 could cause prices to decrease by 20-30%, especially in the 3.5 belt areas.
Sharing the same view, Dr. Nguyen Van Dinh - Chairman of the Vietnam Association of Real Estate Brokers (VARS) - forecasts that this year, housing supply will continue to grow, mainly contributed by suburban metropolitan areas. It is estimated that the real estate supply in Hanoi and satellite cities will reach about 37,000 products, while in Ho Chi Minh City and its suburbs, it is estimated that it will reach about 18,000 products. The supply of residential real estate will reduce regional differentiation.
The supply structure is still mainly high-end and luxury products. However, the supply of the affordable segment will be improved more clearly thanks to the increase of social housing projects.
Source: https://dantri.com.vn/bat-dong-san/chuyen-gia-nhan-dinh-bat-ngo-ve-gia-chung-cu-trong-nam-nay-20250201202144681.htm
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