According to data from the Vietnam Real Estate Brokers Association, apartment prices in major cities in the second quarter of 2023 continued to be recorded at a high level because newly opened projects were mainly high-end projects.
Projects cost an average of VND52 million per square meter in Hanoi, up 1.46% from the previous quarter. In Ho Chi Minh City, the average apartment price was VND67 million per square meter, down 4.6% from the previous quarter. There were almost no affordable apartments priced below VND25 million per square meter in the market. The total supply of affordable apartments decreased by 98% compared to 2019.
Similarly, according to CBRE's report, in the first 6 months of 2023, the total housing supply in Hanoi was about 3,926 apartments. Notably, all the supply for sale was in the high-end and mid-range segments, of which high-end apartments accounted for 51%.
Looking at the above data, it can be seen that investors are increasingly developing high-end apartment segments.
There are more and more self-proclaimed luxury apartments, confusing buyers. (Illustration photo)
However, according to many real estate experts, in addition to truly high-end projects, many investors when opening for sale apartments have given their projects the title of "high-end" or "super luxury" to attract customers and raise prices higher than the actual quality. Many projects have disappointed buyers because of misunderstandings.
Professor Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, said that in many countries there is no concept of luxury apartments. Because in apartment buildings, people are forced to follow general regulations and are influenced by surrounding households.
“ For example, if the house next door is being repaired, other households have to accept the dust and noise. Therefore, living in an apartment building means accepting certain inconveniences ,” said Mr. Vo.
According to Mr. Vo, many investors are just painting and labeling themselves as “high-end” to attract consumers and take advantage of pushing up prices. There are apartments labeled as high-end but they only have large areas, fresh air, good light, and good locations. This is essentially just an advertising “trick”.
Previously, Mr. Le Hoang Chau, Chairman of HoREA, also sent a document to relevant authorities regarding this matter. Accordingly, the Chairman of HoREA said that the real estate market has been flooded with the names of high-end apartments, luxury apartments, super luxury apartments, associated with foreign phrases such as "Luxury", "Premier", "Hi-end", "Royal"...
This is just a trick to attract customers and promote the investor's products. In reality, there are only a few real estate projects that meet high-end standards or model urban area standards.
In fact, many real estate projects, high-rise apartments, and condos are labeled by investors as high-end projects and luxury apartments while they have not been recognized by the Department of Construction or an independent assessment unit.
In the past 10 years, the Ministry of Construction has issued two circulars on apartment building classification. Although there are regulations on apartment building classification and recognition, to date, few project investors or apartment building management boards have prepared documents proposing apartment building classification.
Therefore, it is necessary to review the practicality of legal documents because they do not meet the reality and demands of the real estate market and consumers regarding transparency, honesty and fair competition.
In addition, HoREA also pointed out a shortcoming that the classification of apartments will be transparent in the case of completed projects because then there will be actual apartments, home buyers will not be fooled. However, for future apartments advertised as high-end apartments, luxury apartments, home buyers can easily buy the wrong product as advertised.
Therefore, HoREA proposed that it is necessary to amend the direction that after the apartment building has been completed and accepted, the high-end apartment building category will be recognized to ensure transparency, healthy competition and protect the legitimate interests of home buyers.
Future apartment projects can only be advertised and marketed to raise capital under the name of luxury apartment projects if they have a document recognizing that they meet this criterion issued by the Department of Construction.
According to the Ministry of Construction's report, as of November 30, 2022, there were only 7 classified apartment buildings nationwide in a number of provinces, including Thai Nguyen (3 apartment buildings), Ha Tinh (3 apartment buildings), An Giang (1 apartment building), the rest were not classified and recognized according to the provisions of the 2014 Housing Law.
In fact, in many cases, investors do not classify and recognize the classification of apartment buildings according to regulations, but instead "classify" the apartments they invest in and build with names that confuse buyers and renters of apartments such as high-end apartments, luxury apartments, apartments with foreign names.
According to real estate experts, there are currently many apartments advertised as high-end with sky-high prices. Buyers need to consider many factors instead of just believing in the label of high-end apartments.
Firstly, the project must be located in the central districts of major cities, with convenient traffic connections to major, key routes.
Second, the project must have a modern, synchronous infrastructure and service system, with world-class management and operation quality performed by world-class management brands.
Third, the project is invested and developed by reputable investors.
Chau Anh
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