Apartment prices continue to increase
Over the past two years, the imbalance between supply and demand in the market has caused prices of new and old apartments to increase sharply, commonly by 20-30% compared to 2021. Even apartments priced under 20 million VND/m2 have almost disappeared from the Hanoi market.
Ms. Nguyen Hong Van (an electricity official) said that her family wants to buy an apartment worth about 2 billion VND for her son. This amount of money is not enough to buy an apartment in the inner city because the average price is over 30 million VND/m2. In some areas far from the center such as Ha Dong and Nam Tu Liem districts, this amount of money can only buy an old apartment.
“Housing prices are still increasing while the amount of money saved to buy a house cannot keep up with the "galloping" momentum of the apartment market. Meanwhile, the lending interest rate at the bank is still high at 12 - 13.5%/year, beyond my financial capacity. Therefore, I am forced to choose the option of letting my child rent a house temporarily, waiting for the market price to decrease before buying,” said Ms. Van.
According to the Ministry of Construction, in the first 6 months of 2023, apartment prices in major cities such as Hanoi and Ho Chi Minh City continued to increase. The Hanoi apartment market increased by 16%, mid-range apartments increased by 17%, and high-end apartments increased by 9%. In particular, the highest increase was recorded in Van Giang - Hung Yen with 29%/year, followed by the East of Hanoi (including Long Bien, Gia Lam) increasing by 16%/year. The Western and Northern areas increased by an average of 7%/year.
Specifically, at the BRG Diamond Residence project (Thanh Xuan), the price ranges from 65 - 75 million VND/m2. Therefore, an apartment with an area of 61.3m2 is being sold for 75 million VND/m2, equivalent to nearly 4.6 billion VND. Or at The Zei (My Dinh), the selling price is fluctuating from 50 - 75 million VND/m2.
Or like The Nine project (Cau Giay), the common price is also from 50 million VND/m2 or more. Grand Sunlake project (Ha Dong) is priced from 37 million VND/m2; Terra An Hung project has prices ranging from 35 - 41.5 million VND/m2; The Charm An Hung has prices from 30 - 40 million VND/m2. The price of luxury apartments HDI (Le Dai Hanh, Hai Ba Trung district) at the time of opening for sale was 75 million VND/m2, now it has increased to 101 million VND/m2...
Mr. Nguyen The Diep - Vice President of Hanoi Real Estate Club assessed that the current shift in buyer demand is focusing on the apartment segment because this is one of the products with suitable prices for people to pay. With apartments previously priced from 2 - 3 billion VND, they have increased to 4 - 5 billion VND but people still have the ability to buy.
“In the context of high demand and low supply, price increases are inevitable, and apartment prices continue to remain very high. For projects under construction and newly opened for sale, the price increase margin will be higher, because investors are under great pressure on input costs. It is forecasted that apartment prices will continue to increase in the coming years. Because the demand is very large but the supply cannot meet it. This demand is created by the urbanization process,” Mr. Diep analyzed.
Need to promote the development of affordable housing
Currently, the housing supply is seriously lacking. The whole country has completed about 301 projects with a scale of nearly 156,000 units, and is implementing 401 projects with a scale of more than 454,000 units. In the context of the real estate market facing many difficulties in legal policies and project implementation procedures, instead of waiting for commercial housing projects to be approved, the Ministry of Construction is focusing on developing low-income housing projects, social housing, and rental housing. Because this is a segment with a very large demand. While the implementation of project construction has many incentives in land policies such as exemption of land use fees, investors and home buyers are both entitled to preferential loan interest rates...
Mr. Nguyen Van Sinh - Deputy Minister of Construction said that to solve the problem of supply for the real estate market, the Ministry of Construction has directed localities to promote the management of housing development, especially social housing, housing for low-income and middle-income people. Renovate and rebuild old apartments, strengthen management to ensure the stable and sustainable development of the real estate market.
In particular, it is recommended that localities have specific mechanisms and solutions to shorten administrative procedures for project establishment, approval, land allocation, land lease, site clearance, construction investment procedures, etc. to support, encourage and attract businesses, especially large and reputable businesses in the real estate sector, to participate and implement investment in the construction of social housing and worker housing projects. By all means, to achieve the set target of completing about 550,000 units in the 2021 - 2025 period; completing about 850,000 units in the 2025 - 2030 period.
According to economic experts, the biggest difficulty of the real estate market today is capital and legal issues. The above problems cannot be solved in a day or two, but need at least 1-2 years for the market to recover and grow again. Therefore, the goal that the Government and the Ministry of Construction and localities set out with the social housing development strategy requires the active participation and cooperation of businesses to soon relieve the housing supply for the affordable segment, reducing pressure on the real estate market.
Source
Comment (0)