Surveying prices of new apartments in Dong Da district, the lowest price is from 75 million VND/m2; Hanoi announced 5 projects allowed to be sold to foreigners, most of them are luxury apartments... Those are some notable real estate news last week.
Deputy Minister of Construction: Housing prices increased dramatically even though the transaction market was not really active
At the regular Government press conference on the afternoon of October 7, Deputy Minister of Construction Nguyen Viet Hung answered the press about the sudden increase in housing prices in some big cities, virtual prices even though the transaction market is not really active.
Accordingly, Mr. Hung pointed out the causes of this situation. First, this is the result of the imbalance between supply and demand, when demand is much greater than supply. The second cause comes from the situation of pushing up prices, inflating prices, and auctioning land in some localities. Finally, the factor causing the increase in housing prices is because the input costs for project development are continuously increasing.
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| Mr. Vu Hong Thanh, Chairman of the Economic Committee, spoke at the meeting on the morning of October 9. |
The Deputy Minister of Construction said that there are many legal provisions prohibiting market manipulation and price inflation. In particular, the Penal Code, the Land Law, and especially the 2023 Law on Real Estate Business have very clear provisions on prohibited acts in real estate business.
Mr. Hung said that the Ministry of Construction has issued a document analyzing the cost structure, selling price, reasons for increasing real estate prices and proposed a number of solutions to reduce housing and land prices and stabilize the real estate market.
The Ministry has also issued a document to strengthen the management and control of real estate price fluctuations to the People's Committees of provinces and cities; in which it proposes solutions as well as recommends ministries, branches and provinces to implement specific tasks.
Great real estate market demand
This is the opinion of Prof. Dr. Hoang Van Cuong, Member of the National Assembly's Finance and Budget Committee at the Workshop "Vietnam's real estate market in the context of amending the Law on Land, Housing and Real Estate Business".
According to Mr. Cuong, the current market demand is very high, especially in Hanoi, many projects are sold out as soon as they are launched. However, this is not necessarily a good sign.
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| Prof. Dr. Hoang Van Cuong shares about the real estate market situation. |
“In recent times, legal problems have caused a decrease in supply. In addition, project implementation costs are increasing, and access to clean land is also more difficult. Currently, the supply is mostly projects that have been started before,” said Mr. Cuong.
According to the member of the National Assembly’s Finance and Budget Committee, the situation of real estate prices increasing “explosively” in the context of decreasing inventory but no increase in supply will cause the market to become unbalanced. This will be the time when speculators will benefit the most, instead of real home buyers.
Speaking at the workshop, Mr. Nguyen Van Dinh, Chairman of the Vietnam Association of Realtors (VARS), said that the escalation of real estate prices simply comes from the law of supply and demand. If we want to “cool down” the selling price, the factor that needs to be affected is the supply, instead of administrative intervention.
“The market is currently divided into two segments. One is the high-end segment serving people with good financial conditions and investors. The other is the social housing segment. It is worth mentioning that affordable products, the segment in between the two above segments, are almost non-existent,” Mr. Dinh emphasized.
The head of VARS said that affordable projects are the desire of the majority of people and this is the important missing piece in the overall picture of the market. Policy makers need to have specific regulations to promote this segment, from which the market can truly stabilize.
Number of new apartments in Hanoi increases but house prices still do not decrease
According to CBRE, the supply of new apartments in Hanoi is increasing. In the third quarter of 2024 alone, the market recorded more than 8,200 apartments for sale. In the past 9 months, the total supply of new apartments for sale could reach 19,000 units, exceeding the total supply for the whole year of 2023. This is also the highest number ever recorded in Hanoi in the past 5 years.
In a similar direction, the townhouse segment also saw a significant increase in supply. In the third quarter of 2024, the market had more than 3,200 new units for sale, of which 80% came from urban areas in Dong Anh district. This number exceeded the total new supply in the whole of last year. In total, there were 3,500 new units for sale in the past 9 months, the highest level in the past 5 years.
According to Ms. Nguyen Hoai An, Senior Director of CBRE Hanoi branch, it is forecasted that from now until the end of the year, the supply of apartments and townhouses will have nearly 5,000 new units for sale, mainly from projects of Vinhomes, Sunshine Group and Nam Cuong Group in the West and East of the city.
This year, the number of newly launched apartments and townhouses is expected to be the highest in many years, with nearly 30,000 and 5,000 units, respectively. With these figures, Ms. An affirms that the cycle of housing supply scarcity in Hanoi over the past 4 years has come to an end.
However, despite the increase in supply, selling prices show no signs of cooling down. The average primary price of apartments is VND69 million/m2, up 6% quarter-on-quarter and 28% year-on-year. Similarly, the price of new townhouses is also up to VND235 million/m2, up 16% quarter-on-quarter and nearly 27% year-on-year.
Survey of new apartment prices in Dong Da district, lowest price from 75 million VND/m2
According to the investigation of the Investment Electronic Newspaper reporter, in Dong Da district - one of the busiest and most crowded districts in Hanoi - there are 3 new apartment projects opening for sale.
The first is The Ninety Complex (Lang Street, Nga Tu So Ward), this is a condotel apartment, customers will sign a 50-year lease contract with the investor.
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| The Ninety Complex project is located right on Lang Street, Nga Tu So Ward. Photo: Thanh Vu |
The price of apartments here will fluctuate around 75 - 80 million VND/m2. For apartments with good locations, the selling price will climb to 90 million VND/m2. The service fee at the project is 20,000 - 25,000 VND/m2/month. The apartments are expected to be handed over in the first quarter of 2025.
Note that buyers need to pay special attention to the legal issues of condotel projects. Currently, projects in this segment are still "stuck" in the red book issuance stage, although the Government has issued Decree No. 10/2023/ND-CP to resolve difficulties in this issue. According to discussions with brokers, The Ninety Complex project is still leaving open the possibility of issuing red books to customers.
“After the contract expires, the renewal fee will be calculated according to the land tax at that time. In addition, if the apartment is allowed to be granted a red book in the future, the investor will support residents in making the book. The registration fee will be paid by the residents,” said the broker.
Next is The Gloria apartment project (Nguyen Hong Street, Lang Ha Ward). The apartments from the 3rd to the 8th floors are being sold by the investor as long-term ownership apartments. The upper apartments will be operated as hotel apartments for rent and not for sale.
The project has just handed over houses in the third quarter of 2024. Currently, the fund of apartments for sale directly from the investor has run out, customers can only buy transferred apartments from residents. The average price of apartments here is around 115 - 120 million VND/m2.
According to the broker, if the customer entrusts the rental unit to operate, on average a 2-bedroom apartment can earn about 18 million VND per month (excluding operating costs). However, if the customer rents it out themselves, the income can be up to 25 million VND/month.
Next is the HD Mon Central apartment building (Lang Ha ward, Dong Da district). This project will be opened for sale in November 2024. The apartments offered for sale all have long-term ownership rights. For low-floor apartments, the price will be around 135 million VND/m2. For high-floor apartments, the price will be around 150 million VND/m2.
Hanoi announces 5 projects allowed to be sold to foreigners, mostly luxury apartments
Recently, the Hanoi Department of Construction has announced a list of projects that allow foreign organizations and individuals to own in the city, as of October 2024.
The first project is the HH2-1A building in the Golden Palace A residential, commercial and service complex, with the commercial name The Matrix One (Me Tri and Phu Do wards, Nam Tu Liem district). The investor of the project is Mai Linh Investment Joint Stock Company. Currently, the apartment price here fluctuates around 90-100 million VND/m2.
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| 4/5 announced projects are located in Nam Tu Liem district. Photo: Thanh Vu |
Next is the Viha Complex project (Nguyen Tuan Street, Thanh Xuan District) of a consortium including Xuan Loc Tho Company Limited and Thong Nhat Printing and Trading Joint Stock Company. The apartments here all have at least 2 bedrooms or more, the smallest apartment area is up to 72 m2. The current price is around 90 million VND/m2.
Next are the apartment buildings of the investor HBI JSC. Specifically, including buildings Z38M.1, Z38.1 and U39.1 on land lots F2 - F4 - CH04. In addition, there are also buildings Z38M.1 and Z38.1 on land lots F2 - F4 - CH05.
According to the announcement of the Department of Construction, this project is located in Tay Mo ward, Nam Tu Liem district. Thus, it is highly likely that these will be buildings belonging to the Imperia Smart City project. Currently, new apartments here are being offered for sale at a price of about 70 million VND/m2.
Finally, the U35.1, U35.2, U35.3 apartments belong to lot F2 – CH01 of the new urban area Tay Mo – Dai Mo – Vinhomes Park, commercial name is Vinhomes Smart City (Tay Mo ward, Nam Tu Liem district). The investor of the project is SV Tay Ha Noi Real Estate Development and Business Joint Stock Company.
In a recent report, Cushman & Wakefield stated that Vietnam is an emerging market for attracting investment with attractive profit rates. Currently, the profit rate of residential real estate segments is about 8-10%/year, higher than the 2-3%/year of countries in the region.
Aeon Mall lost more than 7 million USD due to project cancellation in Hoang Mai district
Aeon Mall's first-half financial report for fiscal year 2024-2025 revealed that the cancellation of the project in Hoang Mai district (Hanoi) caused the group to lose about 1.1 billion yen, equivalent to 7.4 million USD.
Previously, in 2019, Aeon Mall Vietnam proposed to the leaders of Hanoi City to implement a parking lot project combined with a shopping mall. By early February 2023, the City People's Committee had approved the detailed planning task for the project. The planning area belongs to Dai Kim Ward and Thinh Liet Ward, Hoang Mai District.
The total planned land area is about 8 hectares, of which 1.97 hectares is for city traffic and 6.06 hectares is project research land area.
The purpose of the project is to form a model of building a parking lot combined with a modern, synchronously connected, scientific, high-tech commercial center, office and warehouse functional area.
Aeon Mall Hoang Mai is expected to become the Japanese group's third shopping center in Hanoi, after Aeon Mall Long Bien and Aeon Mall Ha Dong, with high expectations of contributing to the retail market in the capital.
However, by the beginning of this year, information about the Aeon Mall Hoang Mai project was no longer in the Aeon Group's plan to develop shopping malls in Vietnam.
However, Mr. Furusawa Yasuyuki, General Director of Aeon Vietnam, affirmed that in the long-term vision, Vietnam is still the second key market, besides Japan, in Aeon's strategy.
Aeon Mall's semi-annual report for fiscal year 2024 said the Vietnamese market brought in nearly 8.2 billion yen, about 55 million USD, in revenue for the parent group, up 15% over the same period last year.
Da Nang welcomes 941 more luxury apartments along the Han River
Mr. Tran Van Hoang, Deputy Director of the Department of Construction of Da Nang City, has just signed a notice about future housing in the apartment complex project on the banks of the Han River that is eligible for sale.
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| The apartment complex project on the banks of the Han River is under construction of the foundation and basement. |
According to the Department of Construction, the number of future houses eligible for sale at the Han River apartment complex project invested by Dong Do Group Joint Stock Company is 941 apartments with areas ranging from 45.1 m2 to 264.9 m2, with a total area of 67,522.8 m2.
According to the first investment registration certificate issued by the Department of Planning and Investment of Da Nang City on January 13, 2022, the apartment complex project on the banks of the Han River has a total of 941 apartments, with a total investment capital of more than 1,324 billion VND.
Currently, the project has the commercial name Peninsula Da Nang, Athena Luxury Investment Company Limited is the project developer, Vietnam Smart City Joint Stock Company (belonging to Dat Xanh Group) is the exclusive distributor. The project's products are luxury apartments (including 28 3-bedroom apartments, 164 1-bedroom apartments, 749 2-bedroom apartments) and shophouses in the podium.
The average selling price of the project is about 53.5 million VND/m2, after deducting the preferential policies of the first opening sale. It is expected that in October, November and December 2024, the investor will have price adjustments every 15 days.
Dong Do Group Joint Stock Company was recognized as the winner of the auction of land use rights for Lot A2-1, Nai Hien Dong fishing village residential area (Le Van Duyet Street, Nai Hien Dong Ward, Son Tra District) on August 3, 2020 with the winning bid price of 43.3 million VND/m2. Previously, the starting price was more than 42.17 million VND/m2, the total area of the land was 7,167.5 m2.
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