Hanoi and Ho Chi Minh City property prices continue to skyrocket. (Photo: Int)
Soaring Property Prices
According to the Ministry of Construction, in the fourth quarter of 2023, based on the aggregated reports from localities and market research evaluations, apartment prices in Hanoi and Ho Chi Minh City continue to increase, especially in central areas.
In the market, there are almost no affordable housing projects (priced under 25 million dong per square meter), mostly mid-range apartment projects (priced from 25-50 million dong per square meter) which are eligible for capital mobilization and transactions.
Specifically, in Hanoi, in the fourth quarter of 2023, according to the aggregated reports, some projects experienced average price increases in several areas, such as Thanh Xuan District increasing by about 3.5%; Ha Dong District increasing by about 3.7%; Hoang Mai District increasing by about 3.8%; Nam Tu Liem District increasing by about 4.1%…
In particular, the prices of affordable apartments range from 25-35 million dong per square meter; mid-range apartments range from 35-50 million dong per square meter; luxury apartments have prices above 50 million dong per square meter, with common prices at 60-70 million dong per square meter.
In Ho Chi Minh City, the prices of The Estella project (District 2) increased by about 4.1%, The Opera Residence (District 2) increased by about 3.9%, My Khanh 3 (District 7) increased by about 3.6%, The Art (District 9) increased by about 3.8%. At the same time, there are also some projects that experienced average price decreases, such as The Grand Manhattan (District 1) decreasing by about 4.4%…
In the villa/townhouse market, prices are still high in some areas. In Hanoi, projects like Milan Hanoi City, Ciputra Hanoi, and West Lake Tay Ho Urban Area – Starlake have prices ranging from 160 million dong to over 300 million dong per square meter, despite low transaction volume.
Similarly, in Ho Chi Minh City, prices of villas and townhouses in some areas range from 140 million dong to over 400 million dong per square meter, such as the My Phu 2 Villa project, Vinhomes Central Park, and Saigon Mystery Villas project.
Expectations for Supply Improvement
Regarding this issue, Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association (VARS), said that primary residential prices in Hanoi’s market continue to rise due to the scarcity of projects during this period. Most developers with supply during this period are large developers who are not facing financial difficulties, so their selling prices are high to maximize profits. The average price of primary residential apartments in Hanoi is 51.7 million dong per square meter.
According to Mr. Dinh, primary prices are difficult to decrease due to increased input costs (housing and construction material prices increase by about 6% annually). In addition, inflation and interest rates are rising. Moreover, the number of newly approved commercial housing projects is increasingly scarce and there is also a scarcity of land in central areas.
Furthermore, according to this expert, although primary apartment prices in Hanoi’s market have not decreased, buyers still benefit from prices due to unprecedented preferential policies from developers.
“Buyers can make payments in multiple installments, enjoy preferential interest rates, and have principal deferment with a period 2-3 times longer than previous years. This is driving the liquidity of the primary apartment segment in the market,” said Mr. Dinh.
For villas/townhouses, the prices are currently at a high level. In 2019, apartments selling for less than 20 billion dong accounted for 84% of the market, but by 2023, the proportion of apartments under 20 billion dong dropped to 50%. However, this proportion has increased compared to 2022 due to additional supply. The proportion of apartments priced at over 30 billion dong has increased significantly compared to 2019, reflecting a low supply of apartments under 20 billion dong in the market.
For example, projects in the peripheral area of the beltway 3 such as HD Moon, Vinhomes Gardenia, Vinhomes Greenbay, and older projects like My Dinh 1 Urban Area, My Dinh 2 Urban Area… no longer have units priced below 20 billion dong per unit.
Another trend is that in 2019, villas accounted for 46% of sales, but now that proportion is below 30%, yielding to townhouses. As a result, the total cost of a low-rise house is increasing, causing people to have to pay more.
To solve this problem, according to Ms. Hang, in the near future, there will be a solution to the supply issue. The apartment market will also experience price increases due to insufficient supply improvement.
