Why are real estate prices increasing so abnormally?

DNVN - Real estate prices in big cities are increasing unrealistically, making it difficult for many households to own a home, while speculators are taking advantage of the situation to accumulate and wait for prices to increase. Speculation and price inflation are leading to many consequences...

Unreasonably high house prices

On October 28, the National Assembly discussed the situation of the real estate and social housing market in the period of 2015-2023. The report from the National Assembly's monitoring delegation showed that after the impact of the COVID-19 pandemic, the Vietnamese real estate market fell into a state of serious difficulty. In the period of 2022-2023, the real estate supply decreased sharply, while housing prices continued to escalate, far exceeding the income of the majority of people.

Mr. Vu Hong Thanh - Chairman of the National Assembly's Economic Committee, pointed out that real estate prices in big cities like Hanoi and Ho Chi Minh City are not suitable for people's income. Many urban areas are abandoned, projects are slow to develop, causing waste of land resources and investment capital.

"Real estate prices are increasing beyond income, especially in big cities where there are no apartments suitable for the majority of people," Mr. Thanh emphasized.

Delegate Nguyen Thi Thuy from Bac Kan delegation said that the phenomenon of price inflation, speculation and creating waves has disrupted the market. Real estate prices in big cities have increased unrealistically, making it difficult for many households to own houses, while speculators are taking advantage of the opportunity to accumulate and wait for prices to increase. Notably, in suburban districts of Hanoi , land prices continue to increase sharply despite the lack of new projects, putting pressure on people's incomes.

Delegate Nguyen Thi Thuy - National Assembly Delegation of Bac Kan. (Photo: Quochoi.vn)

According to Ms. Thuy, currently, a part of the population has the mentality of buying real estate to wait for the price to increase. Reality in recent times has shown that every time there is a land or housing fever, the mentality of buying real estate to wait for the price to increase among a part of the population tends to increase. This mentality has caused the already high price of real estate to increase even more strongly.

In addition, there is an imbalance in the apartment segment. Currently, the market is seriously lacking in housing supply, the supply of apartments for people with average incomes. But there is an excess supply of high-end apartment products.

This imbalance between supply and demand not only leads to a scarcity of affordable apartments for the majority of workers, but also poses a high risk of manipulation because there are not many affordable apartments to create competition. And when there is no competition, there will be no pressure from the market for suppliers to reduce prices for this type of product.

Delegate Hoang Van Cuong - Hanoi National Assembly Delegation.

Delegate Hoang Van Cuong from the Hanoi delegation also commented that the current outstanding problem of the real estate market is that real estate prices in big cities are very high and continuously increasing, exceeding the payment level of the majority of people in need of housing, while income from real estate is low compared to the cost of real estate investment.

According to delegate Hoang Van Cuong, the abnormally high real estate prices are due to the increase in people buying real estate for savings, causing the cash flow into real estate to increase, not flowing into production and business; the supply of real estate is increasingly scarce; in addition, market forces such as brokers and auctioneers deliberately push prices up to make a profit.

How to control housing prices?

To address this instability, delegate Nguyen Thi Thuy recommended that the Government encourage the development of commercial housing. There should be attractive incentive policies for businesses to develop housing that is suitable for the income of the majority of workers. The Government should resolutely direct the resolution of outstanding issues in housing projects, in order to add thousands of apartments to the market and reduce price pressure. In addition, the Government should study and implement strong measures to control real estate speculation.

The National Assembly's monitoring delegation also recommended that the Government, the Prime Minister and relevant agencies continue to review and adjust policies to develop a safe and healthy real estate market. It is necessary to diversify supply sources, ensure housing demand is met, and at the same time pay attention to social security. The monitoring delegation also emphasized the need for measures to bring real estate prices back to their true value, preventing price manipulation and inflation.

Meanwhile, proposing specific measures, delegate Hoang Van Cuong said that it is necessary to require land auction participants to prove their financial capacity to limit the phenomenon of auctioning for resale for profit.

Implement the provisions of the Law on Prices, check the price forming factors when the market fluctuates abnormally, and at the same time build a mechanism to manage professional real estate trading floors.

Delegate Cuong also pointed out the urgent need to develop social housing for low-income people. To solve this problem, it is necessary to increase the supply of long-term rental housing at reasonable prices, helping low-income people to rent stable housing. When their income improves, they can switch to buying commercial housing.

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Source: https://doanhnghiepvn.vn/kinh-te/bat-dong-san/vi-sao-gia-nha-dat-tang-cao-bat-thuong/20241028022941377