What is the solution to "cool down" the skyrocketing housing prices?

Building a reasonable land price list

VARS research data shows that housing prices are continuously setting new levels, at high levels, far exceeding the income growth rate of the majority of people.

This situation poses an urgent need to improve the effectiveness of State management of the real estate market, according to the Government newspaper.

Accordingly, whenever the prices of apartments, townhouses, land plots, etc. increase, public opinion will immediately mention the second real estate tax as a solution to "cool down" housing prices. In fact, this is not the first time this policy has been proposed. However, after many times of "raising and lowering", the second real estate tax is still just a topic discussed in the press.

“Efforts to stabilize the real estate market need to rely on policies on land, investment, social housing, etc., instead of just relying on taxation,” affirmed Mr. Le Xuan Nga, General Director of BHS Property.

According to Mr. Nga, land costs in the inner city are very high, causing investors to have a “headache” in compensation for site clearance, land tax payment, etc. With the appearance of the annual land price list, these costs will continue to increase in the future.

Having witnessed many cycles of market fluctuations, Mr. Nga admitted that never before has balancing the price of the final product and the cost of project construction become so difficult. From the perspective of a business, Mr. Nga believes that as long as the land price list is built reasonably, house prices will certainly decrease.

Previously, the Ministry of Construction assessed that when applying regulations on annual land price tables, housing prices could increase by 15-20%.

Increase the supply of social housing for people in real need.

Sharing with Dau Tu newspaper, Mr. Pham Duc Toan, CEO of EZ Property Company, said that for the apartment segment alone, the prospect of commercial projects lowering prices is almost impossible. In Savills's Q3/2024 report, the average price of new apartments has reached 69 million VND/m2, up 6% quarter-on-quarter and 28% year-on-year.

“I think the key to cooling down real estate prices will be social housing urban areas in the gateway areas of the capital. When these projects are completed, housing prices in Hanoi will decrease by 30-40% compared to present,” Mr. Toan asserted.

According to Mr. Toan, many social housing projects in Hanoi are located too far from the center (in Hoai Duc and Quoc Oai districts...), and the technical and social infrastructure is still rudimentary, so even though the selling price is relatively low, only about 10 - 14 million VND/m2, they have been opened for sale more than 20 times and still not sold out.

The CEO of EZ Property Company believes that the State should proactively use budget capital to develop social housing. The implementing agencies can even put profit targets aside and consider this a public investment, implemented for the purpose of social security.

Singapore is one of the pioneering countries to implement this policy. Since the 1960s, the Government of the Lion Island has established the Housing Development Authority to focus on developing social housing. Currently, the rate of home ownership in Singapore is up to nearly 90%, among the highest in the world. Of which, more than 80% of the population is living in social housing projects.

However, excluding social housing projects, real estate prices in Singapore are among the highest in Asia. This is the "playground" of real estate "sharks" and financial tycoons. Even when Singapore raised the second property tax to 20-30%, the prices of commercial projects continued to increase.

Need to develop satellite cities to reduce real estate prices

By 2023, Hanoi's population will be about 8.5 million people and an average of 200,000 people will be added each year. Most of the population lives in the inner city districts, putting great pressure on the city's infrastructure.

Therefore, in the long term, it is necessary to expand the development of satellite cities. This will be a very important step in stabilizing the market and reducing real estate prices. However, it should be noted that completing the connecting traffic infrastructure as well as the accompanying infrastructure will be a big problem for the State budget and will take a lot of time to implement.

Accordingly, suburban areas need to be provided with more amenities, especially public transport systems such as buses and trains to connect suburban districts with the central area of ​​Hanoi.

At that time, the capital will no longer be the only choice for settling down and making a living, the burden of population and urban infrastructure will also decrease, and housing prices will gradually stabilize.

In the long term, it is necessary to expand the development of satellite cities to stabilize the market and reduce real estate prices.

Dr. Tran Xuan Luong (National Economics University) said: “In the long term, we need to expand the development of satellite cities. This will be a very important step in stabilizing the market and reducing real estate prices. However, it should be noted that completing the connecting traffic infrastructure as well as the accompanying infrastructure will be a big problem for the state budget and will take a lot of time to implement.”

According to Mr. Pham Duc Toan, the suburban areas need to be provided with more facilities, especially public transport systems such as buses and trains. This will be the “trump card” to help connect the suburban districts with the central area of ​​Hanoi.

“From there, the local economy will be boosted and attract more businesses to move in. When the capital is no longer the only choice for settling down and making a living, the burden of population and urban infrastructure will also decrease, and housing prices will gradually stabilize,” Mr. Toan commented.

Mr. Nguyen Giang, Ha Dong, Hanoi, a real estate broker, shared that the key to "cooling down" real estate prices will be social housing urban areas in the gateway areas of the capital. When these projects are completed, housing prices in Hanoi will decrease by 30 - 40% compared to present.

"However, many social housing projects in Hanoi are located too far from the center (in Hoai Duc and Quoc Oai districts...), and the technical and social infrastructure is still rudimentary, so even though the selling price is relatively low, only about 10 - 14 million VND/m2, they have been opened for sale more than 20 times and still not sold out," said Mr. Giang.

According to Mr. Giang, the State should proactively use budget capital to develop social housing. The implementing agencies can even put profit targets aside and consider this a public investment, implemented for the purpose of social security, according to Thanh Tra newspaper.

Don't put all your eggs in one basket.

From ancient times to the present, Vietnamese people have always believed that “every inch of land is worth its weight in gold”. This is the reason why a house or a plot of land is not only a place to live, but also a channel to keep money and invest profitably.

Don't put all your eggs in one basket called real estate.

However, according to Dr. Tran Xuan Luong, this concept is becoming somewhat extreme. Many people, when they have idle money, will immediately "pour" it into real estate, invisibly creating "waves" and causing housing prices to rise.

Mr. Tran Vu, Sales Director of DHCONS Construction Joint Stock Company, pointed out that due to the limited financial knowledge and legal understanding of many people, they are easily lured and manipulated by individuals and organizations, "putting all their eggs in one basket" called real estate.

Many people even speculate in real estate, but think they are investing. Especially in the land segment, many individuals spend money to buy plots of land in the suburbs and then charge "sky-high" prices, despite the fact that these real estates do not have any additional value.

According to the Capital Planning Project for the period 2021 - 2030, with a vision to 2050, Hanoi will have two cities under its administration: the Hoa Lac Science and Training City and the Northern City, including the administrative boundaries of Soc Son and Me Linh districts and part of Dong Anh district. In addition, Hanoi also proposed to study the formation of two more cities, including a tourist city in the Son Tay - Ba Vi area and a southern airport city in Phu Xuyen - Ung Hoa, according to Thanh Tra newspaper.

Source: https://www.nguoiduatin.vn/giai-phap-nao-de-ha-nhiet-gia-nha-dang-tang-thang-dung-204241010162723893.htm