The real estate market has shown positive signs.
Recently, according to the first quarter 2024 market report of batdongsan.com.vn, the real estate market has shown positive signs.
According to a survey by batdongsan.com.vn with brokers about the activities of the real estate businesses they are working for, 19% said that businesses increased their staff size and 26% confirmed that businesses increased their marketing budget in the first quarter of 2024.
The amount of interest in Hanoi apartments from investors looking for real estate from Ho Chi Minh City has increased 7.5 times up to the present time.
Commenting on the apartment market, Mr. Dinh Minh Tuan, Director of Batdongsan.com.vn in the Southern region, said that the selling price of apartments in Hanoi has approached that of Ho Chi Minh City, and the number of people in Ho Chi Minh City searching for apartments in Hanoi has increased 7.5 times.
Specifically, the average price of apartments in Hanoi is 46 million VND/m2, while the price of apartments in Ho Chi Minh City is 48 million VND/m2.
At the beginning of 2018, the selling price of apartments in Hanoi and Ho Chi Minh City was 27 and 31 million VND/m2, respectively. After 6 years, the average price increase of apartments in Hanoi reached 70%, surpassing Ho Chi Minh City where apartments increased by 55%.
Explaining the sharp increase in apartment prices in Hanoi, Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn, said there are two main reasons.
Firstly, the supply of apartments in Hanoi is still limited. Although there have been measures to remove legal obstacles for investors, recent new projects only contribute about 20,000 - 30,000 apartments per year, while the normal demand is up to 70,000 - 80,000 apartments per year.
Second, the demand for apartments in Hanoi is still high. Notably, this demand comes not only from Hanoi and the northern provinces but also from the South. Batdongsan.com.vn's big data reveals surprising information, the number of real estate seekers from Ho Chi Minh City interested in apartments in Hanoi increased 7.5 times from the first quarter of 2021 to the present. During the same period, the number of searches for apartments in Ho Chi Minh City by people in Ho Chi Minh City increased only 2 times.
The average price of apartments in Hanoi is 46 million VND/m2, while the price of apartments in Ho Chi Minh City is 48 million VND/m2.
Mr. Nguyen Quoc Anh commented that Ho Chi Minh City residents are increasingly interested in Hanoi apartments because the price level is quite stable and still lower than Ho Chi Minh City. Besides, the profit margin for renting apartments in Hanoi is higher than that in Ho Chi Minh City.
Specifically, the rental yield of apartments in Hanoi from the beginning of 2023 until now has fluctuated from 4.1% - 4.9%, while in Ho Chi Minh City it is 3.9% - 4.5%, according to the first quarter report of Batdongsan.com.vn.
In addition, in recent times, some investors in the Southern market have entered the Northern market. A number of loyal customers from the South of these investors are interested in the projects they have recently developed in Hanoi, contributing to increasing the demand for apartments in Hanoi.
Many subjects benefit when the Real Estate Law is amended
Mr. Le Bao Long, Strategy Director of Batdongsan.com.vn, predicts that changes in the Law may promote land price increases in the future when the frequency of land price updates increases and the level of accuracy is higher.
He analyzed that, with Article 159 of the 2024 Land Law stipulating the removal of the land price framework and requiring the land price list to be updated annually (instead of every 5 years), the Government stipulates that the determination of the Land Price List is by the Provincial People's Committee (compared to before, it was necessary to refer to the Land Price Framework), demonstrating the delegation of power and responsibility to localities, in order to price land closer to the actual situation of the locality. Chapter XI of the 2024 Land Law stipulates the removal of the deduction method, detailing the conditions for applying 04 land valuation methods, also improving the accuracy of land valuation.
In addition, Article 138 of the 2024 Land Law on supplementing detailed conditions for granting Land Use Right Certificates for land in use that is not in dispute also provides better liquidity and price increase opportunities for land products in this category.
Real estate consumers generally benefit from changes in the Law.
In the real estate market report for the first quarter of 2024 of Batdongsan.com.vn, Mr. Le Bao Long stated that if land prices increase, primary real estate prices will also increase due to increased land clearance costs and 3 sets of laws requiring stricter requirements for investors on business conditions, capital ratios and resettlement procedures. The increase in secondary real estate prices will lead to the growth of private home prices and other types of real estate.
In addition, Mr. Le Bao Long said that the supply of social housing is expected to improve with preferential policies and new supports, and regulations requiring provincial People's Committees to allocate sufficient land for social housing. The new Law on Social Housing adds 2 forms of social housing development including foreign capital/foreign organizations and trade union financial resources for workers to rent social housing. Investors are allowed to reserve ≤20% of the infrastructure area for business, enjoy all profits and are exempted from land use/rental fees, and do not have to carry out procedures for determining prices and requesting exemptions.
In addition, experts from Batdongsan.com.vn predict that the quality of real estate projects will also be improved thanks to many stricter regulations on handover standards, progress, etc. For example, Article 36 of the 2023 Housing Law stipulates that investors must have the capacity and experience to implement the project, must not authorize/assign other partners to sign contracts, and can only transfer land after completing and accepting the technical infrastructure system for use, and must ensure the progress of the registered phases.
Mr. Le Bao Long said that real estate consumers generally benefit from changes in the Law. In particular, the two groups that benefit the most are Vietnamese people living abroad and people who are resettled/received compensation.
According to statistics, about 15-20% of remittances are invested directly in real estate. Changes in the Law create a more formal legal framework and more flexible policies, stipulating that Overseas Vietnamese are allowed to transfer land use rights (previously only leased, authorized to manage unused houses). This will further expand opportunities to attract foreign capital into the real estate market.
People who are subject to resettlement/compensation are also guaranteed their rights in many cases. Households and individuals subject to resettlement are provided with conditions for employment, income, stable life and production. The 2024 Land Law also stipulates that resettlement areas must complete technical infrastructure and social infrastructure conditions to ensure the lives of residents. For households and individuals who are compensated when their land is recovered, in cases where they are not eligible to receive residential land but cannot be arranged for other accommodation, they will still be compensated for residential land. Subjects whose non-agricultural land (not residential land) is recovered will also be compensated for land more flexibly than before.
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