Apartment prices increase sharply

Two years ago, the family of Nguyen Ngoc Anh, 31 years old, from Thanh Hoa, saved up 700 million VND. At that time, he thought of trying to save up to 1 billion VND, then he would buy a 2 billion VND apartment in Hanoi on installments. But now this dream has become distant, when the house the family planned to buy has increased to nearly 3 billion VND.

Can't buy, rent is also miserable

"We can't buy a house, while the price of the apartment my family is renting in My Dinh has just been announced by the landlord to increase from 7 million VND to 8 million VND. With this situation, my family is considering moving back to the countryside to live" - ​​Mr. Ngoc Anh confided.

Over the past year, although home loan interest rates have dropped to half of their peak, the real estate market in general has faced many difficulties, but apartment prices in major cities have continued to rise. Many people are now finding it almost impossible to buy apartments with prices ranging from 25-30 million VND/m2 in Hanoi's inner city.

According to January 2024 data from Batdongsan.com.vn, affordable apartments in Hanoi cost around 30 million VND/m2, up 2% compared to December 2023, while mid-range apartment prices also increased by 2%, to 30-50 million VND/m2.

Increased demand is the reason for the sharp increase in apartment prices

Also according to Batdongsan.com.vn, with segments that meet real needs such as buying, selling, and renting secondary apartments or retail space in the inner city, many real estate brokers have started working right after Tet holiday. Scarce supply while increasing demand makes the transaction situation after Tet more vibrant in these segments.

Similarly in Ho Chi Minh City, the price of affordable apartments in January 2024 increased by 4%; the price of mid-range apartments increased by 1% compared to December 2023.

Speaking to a reporter from Nguoi Lao Dong Newspaper, Mr. Nguyen Quoc Hiep, Chairman of Global Real Estate Joint Stock Company (GP Invest), commented that apartment prices have increased unusually recently. The reason is that customer demand, especially among young people, is very high but the supply on the market is low.

Mr. Hiep cited the apartment project on De La Thanh Street, Hanoi, which was built by his company and put into use in 2012. At that time, the investor advertised the apartment for sale at a price of 26-28 million VND/m2. More than 10 years later, the price of this apartment was advertised for sale at 50 million VND/m2, double the starting price. Similarly, The Nice Tower project, Pham Van Dong Street, Hanoi, in 2021, this company advertised for sale at a starting price of 42-46 million VND/m2, after 2 years it increased to 75-85 million VND/m2.

Supply remains scarce

According to this investor, the scarcity of project supply is the main reason for the high apartment prices. For GP Invest, the last apartment project to be implemented and handed over in Hanoi will be in 2022. "For the past two years, we have not had any new apartment projects handed over," said Mr. Hiep.

Apartment prices have increased sharply, so apartment rental prices have also been adjusted by landlords. The Chairman of GP Invest estimated that apartment rental prices in Hanoi have increased by 30%-40% in recent times.

Ms. Hang Nguyen, a real estate investor specializing in the apartment segment in Hanoi, confirmed that apartment prices at present are nearly 80% higher than in 2019. The main reason comes from increased demand and scarce supply.

Statistics from the Ministry of Construction show that with the current population growth rate and housing demand, the country needs about 70 million square meters of urban housing each year. With the current supply development situation, Vietnam will have a shortage of about 300,000 housing units each year. This shortage is pushing up housing prices, especially in the affordable and mid-range apartment segment.

According to real estate experts, if supply is not improved soon, housing price pressure in large cities will continue to increase in 2024, and even last for a long time to come. People with limited income, young families, and families from rural areas moving to the city will have more difficulty finding apartments.

Currently, the Ministry of Natural Resources and Environment is drafting a project "Piloting the implementation of commercial housing projects through agreements on receiving land use rights or having land use rights for other land", expected to be submitted to the Government in early March 2024. The Chairman of GP Invest hopes that this proposal will be approved by the Government, piloting the conversion of other land after the agreement into residential land, thereby solving problems to develop new apartment projects, cooling down this market.

In the current context, to suit affordability, many people have shifted their investment to buying smaller apartments in Ho Chi Minh City and far from the center in Hanoi.

According to Resolution No. 01/NQ-CP, the Prime Minister requested to promote the development of social housing and workers' housing in 2024, striving to complete 130,000 apartments.

Mr. Nguyen Van Dinh, Vice President of the Vietnam Real Estate Association, recommended that the Government should promote projects soon, especially social housing projects, to realize the policy of 1 million apartments by 2030. Promoting more strongly to have housing products suitable for people's budgets and when these products are on the market, people will have more reasonable choices, not creating pressure on demand on the supply side.

Source: https://nld.com.vn/gia-nha-chung-cu-tang-manh-196240304204806502.htm