The lack of affordable apartments, people are desperate to find a place to live; hopefully from the new land price list in Hanoi and Ho Chi Minh City, the speed of speculation will decrease... are the latest real estate news.
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| The affordable apartment segment is completely absent from the market, while mid-range apartments are also increasingly scarce. (Photo: Linh An) |
Apartment prices continue to rise
The Vietnamese real estate market, especially the apartment segment, has been witnessing a sharp increase in prices recently. This has caused many people, even with 3-4 billion VND in hand, to still have difficulty finding a suitable place to live.
According to Lao Dong, the affordable apartment segment is completely absent from the market, while mid-range apartments are increasingly scarce. In early 2024, the market will start with an average price of about 65 million VND/m2.
However, after only two quarters, the price has exceeded 68 million VND/m2 and continued to climb in the last months of the year. New projects launched this year all focus on the high-end segment in areas such as Nam Tu Liem, Cau Giay and Gia Lam, Dong Anh with prices regularly exceeding 70 million VND/m2.
Commenting on the apartment segment, Mr. Vo Huynh Tuan Kiet - Director of CBRE Vietnam's housing marketing department - said that in the fourth quarter of 2024, the primary selling price of apartments in Hanoi reached an average of 72 million VND/m2, an increase of 36% over the same period last year and 12% over the third quarter of 2024.
This increase makes it difficult for many first-time homebuyers, especially young families, to access the market. This means that with 3-4 billion VND, homebuyers do not have many options, they can only own a modest-sized apartment, used for many years, or have to accept a location far from the center. Therefore, many first-time homebuyers, after a long time of searching, have had to suspend their plans because the price is beyond their financial capacity.
Ms. Ngoc Van (33 years old, Nam Tu Liem, Hanoi) shared that after many years of saving, she and her husband planned to buy an apartment with a budget of 3 billion VND. However, when researching the market, she realized that apartment prices had skyrocketed, far beyond her family's ability to pay, so she had to postpone her plan to buy a house due to escalating prices.
In the context of rising apartment prices, owning a house with a budget of 3-4 billion VND is becoming difficult as apartment prices continue to rise. This not only makes it difficult for people with average and low incomes to own a house, but also reduces the sustainability of the market. Cooling down housing prices has become an urgent requirement to ensure people's access to housing and stabilize the economy.
One of the solutions to reduce real estate prices in Hanoi is to promote the development of social housing.
Dr. Nguyen Van Dinh - Chairman of the Vietnam Real Estate Brokers Association - said that social housing is an important direction to reduce pressure on housing prices in the market. In addition, it is necessary to step up the removal of legal obstacles in projects to unclog supply in the market.
Hanoi land prices increase sharply, some people worry about spending tens of billions to convert
The adjusted land price list announced by the Hanoi People's Committee and effective from December 20, 2024 until December 31, 2025, recorded a sharp increase compared to the old land price list. This also caused people's land use costs to skyrocket.
Mr. Pham B. (My Duc district, Hanoi) said that at the end of 2024, he had just completed paying land use fees to convert part of his residential land into garden land. Because the time to receive the decision to complete the dossier was after December 20, 2024, the land use fee applied according to the new price list was more than 800 million VND. Meanwhile, if applied according to the old land price list, his family would have to pay about 350 million VND.
Ms. Nguyen T. (Long Bien, Hanoi) shared that her family has more than 1,000m2 of garden land, and now wants to convert it into residential land to divide among her children, so she has to pay about 15 million VND/m2. Thus, the estimated amount to convert the entire area is about 15 billion VND. This number exceeds her financial capacity, so the family is considering to balance it appropriately.
The increase in land prices and the resulting increase in land use fees have also forced many investors holding agricultural land in the suburbs to adjust their investment plans.
At the recent workshop on applying land price list according to the 2024 Land Law, Prof. Dang Hung Vo, former Deputy Minister of Natural Resources and Environment (MONRE), assessed that in reality, whether the land price list is low or high, there are "complaints".
Mr. Vo emphasized that the land price list must be equivalent to the market and suitable for the market. The problem is how to implement and apply it? This is the story of the State's policy. In which cases will 80% of the market be applied, in which cases will 20% of the market be applied, specific cases will have different application rates. How to apply it to attract investment, develop the economy, and ensure social security depends on the State's regulatory policy.
Mr. Le Van Binh, Deputy Director of the Department of Land (Ministry of Natural Resources and Environment), said that real estate projects (housing, resort real estate) do not apply land price lists but apply specific methods for calculation. The land price list is mainly to collect financial obligations of individual households and cases of annual land lease projects; other cases are auctions and bidding.
Regarding the cost of converting land use to residential land, Mr. Binh assessed that in Hanoi, the conversion of agricultural land in residential areas or agricultural land attached to residential land to residential land is now very equal. Previously, the conversion was very difficult because the price for people to convert was only half the price of residential land.
According to the Deputy Director of the Land Department, the land price list approaching the market price is a fair game, there is no longer a difference between the two prices. Market participants accept a fair playing field, land prices are no longer different so that people can see that family land converted to residential land, even if sold back to the public market, is not worth much, so it will gradually become saturated.
Assessing the new land price list of Hanoi, according to experts from Savills Vietnam, the impact on real estate prices is insignificant but also helps reduce the speed of speculative waves, people receive compensation close to the actual value...
Ms. Nguyen Thi Hong Van, Deputy Director of Valuation and Financial Consulting Department of Savills Hanoi, recommends that investors who are currently speculating in buying and selling should consider more carefully, as 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.
New land price list in Ho Chi Minh City: Improving transparency and promoting infrastructure development
Recently, Ho Chi Minh City (HCMC) announced a new land price list according to Decision No. 79/2024/QD-UBN effective from October 31, 2024 to December 31, 2025. This is the first adjustment since 2020, with land prices increasing sharply, from 4 to 38 times depending on the area. The lowest price in Thieng Lieng (Can Gio district) is 2.3 million VND/m2, while the highest price on central streets of District 1 such as Dong Khoi, Le Loi and Nguyen Hue is 687.2 million VND/m2.
The adjustment of land prices is believed to not only ensure fairness, but also accelerate the city's important infrastructure development projects. Land valuation close to market value helps minimize disputes in site clearance - one of the main reasons why major projects such as Ring Road 3 and Metro Line 2 have been delayed for many years.
The new land price list has many impacts on different groups of subjects in the market, from people, businesses to foreign investors. It can be said that people whose land is recovered have their rights guaranteed much more than before and this is the main group affected.
With prices approaching market value, compensation becomes more transparent and reasonable, helping to reduce land disputes. This is especially important in large infrastructure projects such as Ring Road 3 or Metro Line 2. According to Ms. Giang Do, Director of Savills Vietnam Consulting, the new land price list not only helps increase public consensus but also speeds up site clearance, which is a key factor for large projects.
In addition, a more transparent investment environment thanks to the new land price list is also a plus. Foreign investors can easily determine costs and calculate profits, especially in the context of Ho Chi Minh City becoming the leading economic center of the region. "The more transparent adjustment of the land price list, based on actual value, will create greater confidence for foreign investors. This is a necessary step to ensure sustainable development of the market", said a representative of Savills Vietnam Consulting Department.
On the other hand, the new land price list creates financial pressure for investors. The high cost of land use causes the price of real estate products to escalate, directly affecting people's ability to access housing.
“We are concerned that rising land use costs will put pressure on product prices, especially in the housing segment for low- and middle-income earners. This is a challenge that needs to be carefully considered,” said Ms. Giang Do. In suburban areas in particular, the new land prices make it more difficult to convert land use from agricultural land to residential land, reducing opportunities for developing affordable housing projects.
Source: https://baoquocte.vn/bat-dong-san-gia-chung-cu-tang-vu-vu-kho-tim-noi-an-cu-bang-gia-dat-moi-tai-ha-noi-tphcm-tao-cuoc-choi-binh-dang-giam-toc-lan-song-dau-co-300820.html
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