The apartment 'fever' has not ended, but now comes the land price inflation

Recently, apartment prices have increased sharply, so many people have turned to looking for residential land to buy. It is worth mentioning that the wave of increasing apartment prices has affected the residential land segment.

Real estate brokers 'inflate' land prices

A townhouse in the General Department 5 area (Tan Trieu, Thanh Tri, Hanoi), area 101m², frontage 5.2m, facing South, completed 6 floors with elevator, has been advertised for sale by the owner for 6 months now for 17.5 billion VND and the contact phone number has been posted in many public areas as well as on websites, zalo, personal facebook but no one has asked to buy.

“Because I needed capital to invest in the food industry, I decided to sell my house and asked a broker to find a buyer. However, after nearly 4 months, the broker still could not bring any buyers to inquire about or see the house,” said Mr. Tran Manh Phuong, the homeowner.

A townhouse in General Department 5 (Tan Trieu, Thanh Tri) was advertised for sale by the owner for 17.5 billion VND, but the broker raised the price to 19.5 billion VND. (Illustration photo).

According to observation, the house is quite airy, designed and completed with high-class interior. The 1st and 2nd floors are open-plan for business purposes or for business rental. The 3rd and 4th floors, each floor has 2 bedrooms and 2 private bathrooms. The 5th floor is open-plan for kitchen and living room. The 6th floor is used as a worship room, warehouse and drying yard.

Posing as a real estate investor, the reporter contacted a number of real estate brokers in the Hanoi area. Being suggested to look for a house next to the General Department 5 area, broker Pham Ba Minh led him to the house of Mr. Tran Manh Phuong. Minh introduced that the house has an area of 101m², a frontage of 5.2m, facing South, overlooking a field of water spinach, has been completed with 6 floors and an elevator.

“The road in the area is 13m wide, the house is located near the corner so it is very airy. This is a high-class residential area, mainly for officers in the armed forces and businesses. It is also close to many schools of all levels and universities. The house has a red book, ready for transaction and immediate delivery. The selling price is 19.5 billion VND. Because the broker is paid 1% of the house by the seller, I do not raise the price,” said broker Minh.

Thus, through a broker, the townhouse that the owner advertised for sale at 17.5 billion VND was raised by the broker to 19.5 billion VND, which is a difference of 2 billion VND compared to the original price.

On the afternoon of April 13, reporters continued to investigate land prices in the Hoa Lac area. Real estate broker Nguyen Ngoc Nhat said that the current transaction price is from 23-25 million VND/m2 depending on the area, area, and access road.

“The land here has all been red-booked. For more than 2 months now, there have been a lot of customers coming to buy and sell. The selling price after Tet was 21 million VND/m2, now it has increased to 23-25 million VND/m2, an increase of 2-4 prices/m2. If you don’t decide and pay quickly, the land price will increase even more,” said broker Nguyen Ngoc Nhat.

Pointing to a plot of land with an area of 70 square meters, 4.5 meter frontage, facing South, Nhat said that the owner of this plot of land is selling it for 24 million/square meter, including him, 5 people came to inquire in just 4 days.

“If you close the deal right away, the homeowner will get a bonus of 10 million. The homeowner will pay the brokerage fee, personal income tax, the buyer will pay the registration fee, and the red book transfer fee. The total amount to be paid for the land here is about 1.7 billion VND. If you close the deal early, you should deposit 100 million VND so that the homeowner does not go back on the deal while land prices are showing signs of increasing sharply at present,” Nhat said.

On the morning of April 14, the reporter contacted the broker again and was informed by Nhat that the homeowner had sold the land for 24.5 million VND/m2, 500,000 VND/m2 higher than the initial price.

"It's a pity you didn't close the deal early. There's one last lot on the opposite side, facing North, the owner is selling it for 24 million/m2, if you close it, we can meet to put down a deposit to buy and sell," Nhat said.

According to the reporter's investigation, the 70m2 plot of land facing south was sold by the owner for 22.5 million VND/m2, not the price of 24.5 million VND/m2 offered by broker Nhat.

What to do to avoid buying expensive?

According to a reputable real estate consultancy, in the first quarter, residential land prices recorded a price increase of 10-20% compared to the end of 2023.

Specifically, the price of private houses in Nam Tu Liem district with an area of 30 - 40 m2, small alleys, cars cannot enter in the areas of Me Tri, My Dinh, Trung Van, Phu Do... has increased from 2.8 - 4.4 billion VND/unit to 3.4 - 4.8 billion VND/unit.

Apartments with an area of 30 - 40 m2, with cars parked at the door, also increased in price from 4.8 - 5.5 billion VND/apartment to 5.2 - 7.5 billion VND/apartment.

Land prices are showing signs of being pushed up by real estate brokers (Illustration photo).

Currently, the price of houses and land in Nam Tu Liem is being advertised at a common price of 143.5 million VND/m2, this price increased by 6.1% compared to the same period last year and is the highest in the past 5 years.

According to the first quarter 2024 report from the One Mount Real Estate Center for Market Research and Customer Insights, the transfer transaction market in Hanoi is estimated to reach about 15,000 - 16,000 transactions. Of which, the majority come from residential townhouse transfer transactions with more than 50% of the total market transaction volume; high-rise apartment transfer transactions ranked second with nearly 42% of the transaction volume.

The volume of real estate transactions in the second quarter of 2024 is forecast to continue to increase in both the apartment and residential segments.

According to this unit, Long Bien, Nam Tu Liem and Bac Tu Liem are the 3 districts with the most active residential land transactions from December 2023 to February 2024. The transaction trend is forecasted to continue to heat up in these 3 districts in the second quarter of 2024. The price segment chosen by many customers ranges from 3-7 billion VND.

From 2018-2024, the number of residential transactions in Long Bien is always in the top of districts in Hanoi. The reason is due to the complete infrastructure, diverse living facilities and convenient location when moving into the inner city, full of reasons for the Long Bien residential market to make a strong breakthrough.

Dr. Nguyen Van Dinh, Chairman of the Vietnam Association of Realtors (VARS), said that in the past, houses and land with small areas, especially houses and land in alleys, were often the segment that buyers bought for real estate and compared with apartment prices.

However, the sudden increase in apartment prices in both the primary and secondary markets in recent times has prompted a group of customers to switch to real estate. Therefore, real estate prices have been pushed up by brokers to make a profit.

“To avoid falling into the trap of brokers, investors and land buyers with real housing needs need to carefully research the land in the investment area, and can even research and find the real land owner to make a transaction, to avoid being fooled,” Mr. Dinh analyzed.

PHAM DUY

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