Apartment prices have been increasing steadily over the years.
According to Ms. Pham Thi Mien, Deputy Head of Market Research and Investment Promotion Consulting Department, Vietnam Association of Realtors (VARS), in the last months of 2023, the apartment segment has recovered, caught the growth wave again, and even maintained the growth momentum throughout the past period.
Apartment projects in cities are continuously setting new price levels. Many apartments have increased in price by up to 40% compared to the peak of the pandemic and increased by about 20% compared to mid-2022.
In 2023 alone, the apartment price index in Hanoi at the end of 2023 increased by 16 percent compared to the beginning of the year.
In Ho Chi Minh City, the apartment price index in this area has also entered a growth cycle again since the third quarter of 2023. The average primary selling price of apartments nationwide is also high when the new supply to the market is mostly products priced above 40 million VND/m2, with almost no projects in the affordable apartment segment.
Dr. Nguyen Van Dinh, Vice Chairman of VARS, said that apartment projects in cities are continuously setting new price levels. Many apartments have increased in price by up to 40% compared to the peak of the pandemic and increased by about 20% compared to mid-2022.
According to data from VARS, apartment rental prices in Hanoi have increased significantly in recent years, with one-bedroom apartments being rented for VND7-8 million/month, up 10-15% year-on-year. Two-bedroom, fully furnished apartments are priced higher, with a lower increase of about 10% year-on-year, to around VND10-11 million/month.
Similarly, in Ho Chi Minh City, apartment rental prices have also started to increase slightly in recent times, especially in inner-city areas, commonly from VND500,000 to VND1 million/month.
Although before that, in mid-2023, apartment rental prices in Ho Chi Minh City remained the same, even slightly decreased in some large apartments after rental prices increased sharply at the end of the pandemic.
For example, the rent for a one-bedroom apartment at Vinhomes Golden River in District 1 has increased from VND15 million/month to VND20 million/month when the old contract just expired. Projects far from the center such as Sunrise Riverside, New Saigon (Nha Be district)... have also increased in price due to the massive increase in demand from tenants.
Apartment prices are expected to continue to increase, around 10% for at least another year, when there is more supply of affordable housing.
The demand for rental housing tends to increase.
According to Dr. Nguyen Van Dinh, renting a house is currently the choice of many families, when the high price of apartments makes home ownership increasingly difficult for the majority of people. Although loan interest rates, including home loans, have decreased.
Nowadays, investing in apartments and then renting them out has become a popular trend in big cities, as it not only brings in a steady cash flow from monthly rentals, higher than savings, but also benefits from the potential for price increases.
However, home loans and monthly repayments are still a burden for many families as people are not really confident about their future jobs and incomes due to the volatile economic situation. Housing rentals will continue to increase strongly, thanks to the large increase in the number of foreign experts coming to Vietnam through FDI projects.
“In particular, in the context of many changes in consumption trends, when the Millennial-Z generation, accounting for 47% of the Vietnamese population, focuses more on lifestyle, living environment, and utility systems to improve the quality of life. Most of them will choose to live in apartments with full amenities and a better living environment - something that residential land with similar prices cannot have, renting a house is also the priority choice of this generation. Therefore, the demand for rent is still on the rise while the available supply is lacking due to the continuous decrease in housing supply, especially apartments, causing rental prices to increase,” analyzed Dr. Nguyen Van Dinh.
The price of buying, selling and renting apartments has been increasing continuously in recent times, which has also broken the prejudice that investing in apartments is a "consumer asset". If in the past, most people thought that apartments were a type of unprofitable purchase and sale, only causing losses, choosing to invest in residential land, having a piece of land to settle down is the optimal solution because of its easy liquidity and high profitability.
Nowadays, investing in apartments and then renting them out has become a popular trend in big cities, as it not only brings in a steady cash flow from monthly rentals, higher than savings, but also benefits from the potential for price increases.
Dr. Nguyen Van Dinh also predicted that rental prices will continue to increase but at a slower pace. The outlook for the apartment market is becoming clearer as production and business activities are gradually recovering, leading to a large demand for housing in large cities.
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