Reasons for real estate price increase in Q3-2024

The phenomenon of real estate price increases in Hanoi, Ho Chi Minh City and some large cities is localized, occurring in some areas, types and segments, leading to the impact of increasing general prices.

Housing prices in Hanoi have been pushed up for a long time and the price increase has not stopped in the third quarter of 2024 - Photo: NAM TRAN

The above assessment was made by the Ministry of Construction in a report announcing information on housing and real estate market in the third quarter of 2024 just released.

Four reasons for rising real estate prices

Accordingly, in the third quarter, apartment prices in Hanoi and Ho Chi Minh City increased by 4-6% compared to the previous quarter, increased by 22-25% compared to the same period last year, and in some areas, prices increased locally by 35-40% compared to the previous quarter.

Through market analysis, the Ministry of Construction said that there are 4 reasons for the increase in real estate prices in the third quarter of this year.

That is the increase in real estate prices due to increased land-related costs, the impact of applying the new land price list, and the method of calculating land prices.

In some localities, there is a phenomenon of land use rights auctions with winning bids many times higher than the starting price. The management and implementation of land auctions are not good, there is a phenomenon of investors forming associations and groups to participate in auctions, paying land prices many times higher than the starting price, then abandoning the deposit after winning the land auction with the aim of establishing a virtual price level to make a profit.

The auction of land use rights with the winning bid being many times higher than the starting price will have the impact of increasing the land price level, real estate price, housing price in the neighboring area, increasing the cost of implementing housing projects, causing difficulties for businesses, and reducing supply to the market.

Second is the phenomenon of "creating virtual prices" and "inflating prices" by speculators and real estate brokers who take advantage of people's lack of knowledge and invest according to the crowd psychology to make profits.

These are individuals who work as freelance brokers, do not have real estate brokerage certificates, are weak in expertise, have limited legal knowledge, and are weak in business ethics, leading to opportunistic business practices, colluding to set prices, inflating prices compared to actual values, manipulating the market, causing damage to customers, and reducing market transparency.

Third, due to the lack of real estate and housing supply to meet the needs of the majority of people, low-income and middle-income earners in urban areas, especially in Hanoi and Ho Chi Minh City. In the first 6 months of 2024, the number of completed commercial housing projects was 90.48% compared to the first 6 months of 2023.

Fourth, fluctuations in the stock, bond, and gold markets affect investor psychology, causing cash flow to shift to investing in real estate as a "shelter" and accumulating assets.

Proposing a series of solutions to stabilize the market

To limit the possibility of real estate trading floors and real estate brokers colluding and disrupting the market, the Ministry of Construction said it is coordinating with the Ministry of Natural Resources and Environment to research and propose granting authority to pilot the model of a real estate transaction center and land use rights managed by the state.

And coordinate with ministries and branches to guide and urge localities and enterprises to effectively implement the Project to invest in building at least 1 million social housing apartments for low-income people and industrial park workers in the 2021-2030 period to increase market supply.

Urging local authorities to speed up the renovation of old apartment buildings.

The Ministry of Construction also recommended that the Ministry of Natural Resources and Environment review and promptly detect inadequacies in regulations on land use rights auctions to advise and propose competent authorities to amend them appropriately, to prevent profiteering in land use rights auctions, causing market disruption.

Inspect land auction activities for cases showing signs of abnormality, and handle according to authority cases of violations of land auction regulations.

Monitor and synthesize information on the issuance of land price lists by localities according to the provisions of the 2024 Land Law to assess the impact on land prices. Timely propose solutions to limit negative impacts on land prices, housing prices and market supply and demand when issuing new land price lists.

At the same time, it is recommended that the Ministry of Finance research, propose, and advise competent authorities on tax policies to limit speculative activities and short-term buying and selling for profit.

Research on tax policies for second homes, land, abandoned and unused homes and land.

For localities, the Ministry of Construction recommends inspecting and reviewing real estate business activities of enterprises, investors, real estate trading floors, and real estate brokers in the area.

Control the buying and selling of real estate that changes hands many times, especially in areas, projects, and apartment complexes with unusual price increases.

Conduct inspections, checks, and take measures to correct acts of price inflation, price manipulation, speculation, and handle violations of land laws, real estate business laws, and related laws (if any) within authority.

Localities must have measures to strictly manage the construction of houses for people in land use right business projects with technical infrastructure in the form of dividing plots and selling land according to the provisions of law. Avoid the situation where people leave land empty, carry out speculation, buy and sell by hand, "inflate prices" causing disruption to market information.

Organize the announcement and disclosure of information about the real estate market to ensure transparency and prevent fraud, deception and scams.

Source: https://tuoitre.vn/nguyen-nhan-khien-gia-bat-dong-san-tang-trong-quy-3-2024-20241030154932064.htm