'Shocked' by the skyrocketing apartment prices, many people are looking to buy houses in alleys

The high and continuously increasing prices of apartments recently have caused many buyers to give up the idea of buying an apartment and look for a house in an alley with a more affordable price.

Why do apartment prices keep increasing?

For more than 3 months now, since before the Lunar New Year, Mr. Phung The Anh (from Thai Binh) has been continuously visiting real estate buying and selling groups, websites of investors, real estate brokers and directly surveying many projects to buy a 2-bedroom, 2-bathroom apartment, area of 60 - 70m2 with a price of 2 billion VND or less but could not find one.

The increasing price of apartments makes it difficult for those in need to access them. (Photo: Ngoc Thanh)

“A Gemek I apartment in An Khanh commune (Hoai Duc) with an area of 69 square meters is being sold for 2.5 billion VND, equivalent to about 36 million VND/square meter. A used apartment closer by, Eco Green in Tan Trieu commune, Thanh Tri district, is being sold for 43-45 million VND/square meter. New apartments cost from 50-80 million VND/square meter. With this price and the amount of money we have, we don’t even dare to dream about it,” said Mr. The Anh.

Also looking to buy an apartment, Ms. Le Phuong Uyen (from Nam Dinh), who is working as an accountant for a food company in Hanoi, said that for nearly 6 months now, her family has been continuously looking to buy a 2-bedroom apartment, about 60 - 80m2 in area, with a price of about 2 billion VND, but has not found one.

Ms. Uyen cited that a used apartment at Phuong Dong Green Park (Tran Thu Do, Hoang Mai) is also being sold for 48 million VND/m2. Another neighboring project - Rose Town at 79 Ngoc Hoi, with only 30 years left, a 65m2 apartment is also over 2.6 billion VND, a long-term apartment is 3.1 billion VND.

“Even old apartments like Sudico My Dinh, which have been handed over for over 10 years, have an average price of 3.4-3.7 billion VND/apartment with 2 bedrooms. Most apartments currently cost 3.6-4.2 billion VND for a 2-bedroom apartment. An apartment price of over 40 million VND per square meter is too high,” said Ms. Uyen.

Mr. Nguyen Van Dinh, Chairman of the Real Estate Brokers Association, said that the continuous increase in apartment prices is due to the scarcity of apartment supply in Hanoi in recent years. The number of projects is increasingly limited, while market demand is continuously increasing, the product structure in the real estate market is increasingly unbalanced.

"Currently, apartments priced at VND30 million/m2 have disappeared from the market. Apartment prices are too high, leading to people with real housing needs not being able to access them," said Mr. Dinh.

Trend of buying houses in alleys

Apartment prices are too high and expensive due to few new projects, causing many people to look to buy houses in alleys to live in and rent out.

Mr. Nguyen Huy San (from Hai Duong) said that after 6 months of not finding an affordable apartment, he had to switch to a ground-level house in a small alley.

Apartment prices are expensive, so many people tend to look for houses in alleys. (Photo: Thu Giang).

“A week after Tet, thanks to the support of real estate brokers, the family bought a 42m2, 5-storey house in an alley on Minh Khai Street, accessible by car, for 4.5 billion VND, equivalent to about 107 million VND/m2," said Mr. San. "Buying a house on the ground makes you feel like you are the owner, not dependent on the investor, not having to share the stairs and other services, and especially not having to worry about electricity and water services."

Also switching from buying apartments to houses, Mr. Pham Van Nghiep (from Bac Giang) shared that with the savings of 2.5 billion VND to buy an apartment, he could only find an old apartment, nearly 20km from the center of Hanoi, with an area of no more than 80m2, 2 bedrooms, and common living for a family of 6 people, 3 generations, which is very inconvenient and complicated.

“My family decided to switch from buying an apartment to buying a ground-level house, area 48m4, 5 floors, alley 2 motorbikes pass each other. In addition to the 2.5 billion VND we already have, my family borrowed an additional 1.1 billion VND to own a house with 7 bedrooms, 5 bathrooms, 2 kitchens, 1 drying yard, a family of 3 generations, 6 people can live comfortably, and there is still a room to receive guests from the countryside,” said Mr. Nghiep.

According to real estate businesses, since the Lunar New Year, interest in real estate, especially houses in alleys, has rapidly increased again. Specifically, compared to the beginning of 2023, the real estate market at the beginning of this year has shown positive signs, especially in the level of interest and number of listings.

Search demand in January 2024 increased by 66% compared to the same period in 2023, the number of real estate listings also increased by 52%. Notably, in Hanoi and Ho Chi Minh City, land and project land have increased in interest more strongly than apartments.

Specifically, in January 2024, the number of searches for land in Hanoi increased by 110%, project land increased by 77% compared to the same period last year. Meanwhile, the number of searches for apartments in Hanoi increased by 71%. Similarly, in Ho Chi Minh City, the search demand increased by 71% - 73% for land, project land and only increased by 59% for apartments.

Although the market did not experience a "land fever" like in early 2022, the above figures partly reflect the desire of many people to have a place to live in the form of real estate.

PHAM DUY

Source