Real estate prices are 'dancing': Will land fever return?

Since the beginning of the year, real estate prices have continuously increased sharply, surprising many people, in which the two segments with the strongest increase are apartments and residential land.

According to data from the Vietnam Real Estate Brokers Association, apartment prices in Hanoi in early 2024 increased by about 38% compared to 2019. In Ho Chi Minh City, prices in this segment increased by 16%.

Also emphasizing the reality of increasing apartment prices, a report by PropertyGuru Vietnam Company shows that in the first quarter of 2024, apartments in Hanoi had an average price of 46 million VND/m2, an increase of 17% over the same period last year.

Surveying the market, it is easy to see that apartment prices are constantly being adjusted to increase.

Mr. Tran Van Liem (Hoang Mai District, Hanoi) informed that at the end of 2023, he and his wife were quoted a price of 2.7 billion VND for a 70m2 apartment on Ngoc Hoi Street (Hoang Mai District). But by the beginning of 2024, the price of this apartment had increased to 2.9 billion VND and up to now, the price has continued to increase by 200 million VND, up to 3.1 billion VND, which surprised Mr. Liem.

" Currently, apartments with similar locations and areas to this one are being offered for sale at prices ranging from 3 to 3.1 billion VND. I am very surprised because apartment prices increase every month and increase by hundreds of millions of VND ," he said.

Similarly, Ms. Tran Nguyet Minh (Ha Dong, Hanoi) also made a profit of 200 million VND after only a few months of investing in an apartment. In December 2023, she bought an apartment in Linh Dam (Hoang Mai district, Hanoi) with the purpose of "surfing" the market. At the time of purchase, the price of the 60m2 apartment was 2.6 billion VND. But by January 2024, her apartment was asked to be bought back by a broker for 2.7 billion VND and now the broker is willing to pay 2.9 billion VND.

Experts predict that a land fever is unlikely to occur in 2024. (Illustration photo)

Not only apartments, residential land prices, especially houses in alleys, are also "skyrocketing". PropertyGuru Vietnam's report shows that the residential land market in Hanoi in 2024 will continue to record growth. In particular, private houses in Tay Ho district increased the most with 9%. Other districts such as Dong Da, Ha Dong, Hai Ba Trung, Hoang Mai also increased by 4 - 8%.

Despite the sharp price increase, the trading volume is still very high, making the market increasingly hot.

Expert: Land fever is unlikely to return

Rapid price increases and the revival of the real estate market are causing many people to predict that a new land fever like in 2021 may occur.

However, according to experts, this is not a cause for concern, as the market is much more transparent than before.

The recent price increases in some real estate segments are not a land fever. (Illustration photo)

Mr. Pham Duc Toan, CEO of EZ Real Estate Investment and Development Joint Stock Company (EZ Property), said that the "bottom" of the real estate market can now be determined to be the second and third quarters of 2023. The recovery took place afterwards, in the context of a sharp decrease in bank interest rates. The low interest rate effect continued into the first quarter of 2024, causing investors to decide to withdraw their investments instead of depositing in banks.

However, that does not mean the market will have a fever. " I see that in the short and medium term there will not be a "land fever". Recent moves by the State such as the draft on taxing second homes, limiting transactions to 5 houses... all show that investment will be increasingly tightened, instead of being as easy as before ," he said.

Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, also said that the recent price increase in some real estate segments is not a land fever but a local abnormal sign in the market.

“ In the context of real estate not fully recovering, projects still being stalled, people and businesses still facing many difficulties… the phenomenon of prices still increasing and increasing again in areas without new projects is not normal ,” Mr. Dinh stated his opinion.

Explaining the reason for this "abnormality", Mr. Dinh said that over the past 2 years, investors have had no opportunity to invest because there is no supply. This may have caused some businesses and brokers at this time to create fake information about prices, infrastructure... making the market hot, but that is not the nature. The purpose is to stimulate investors to spend money.

" Experienced and knowledgeable investors rarely get involved in that, and if they lack specialized knowledge, they can easily get caught up in this wave. In a difficult economic context, without any specific large investments in that area, if land prices suddenly increase, we should immediately suspect that it is an unrealistic price increase that is not in accordance with the law, " Mr. Dinh emphasized.

Meanwhile, from the perspective of the project developer, Mr. Nguyen Anh Que, Chairman of G6 Group, also said that just because apartment prices are increasing does not mean they cannot decrease.

The proof is that in the past, in the period of 2008 - 2010, there were apartment projects priced at 50 - 70 million VND/m2. However, in 2011 - 2013, when the market appeared low-cost commercial housing projects, the apartment prices on the market immediately cooled down.

Therefore, the representative of G6 Group commented that if the old scenario repeats, housing prices may decrease from 2026. The reason is that housing projects in general and social housing in particular will begin to complete procedures, increasing supply in about a year later, helping to cool down housing prices.

Chau Anh

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