Anh Tran Van Tien (Dong Da, Hanoi) shared that he invested in 2 plots of land in Bac Ninh since 2022, but by the end of 2023, he decided to sell them to raise money to invest in apartment buildings.
“The market is sluggish and it is unknown when it will recover. Meanwhile, the prices of my 2 plots of land have dropped by 20% compared to when I bought them. Therefore, to prevent the money from being “buried” for too long, I decided to sell these 2 plots of land for over VND 7 billion and invest in 2 apartment buildings in Hai Ba Trung district (Hanoi),” Mr. Tien said.
It is known that the 2 apartment buildings Mr. Tien has just purchased cost VND 7.2 billion, and he has already rented out both apartments for VND 13 million/month/apartment.
“Currently, the price of apartment buildings is increasing well, so in the long run, the assets still have profit, while there is still a monthly cash flow for me to spend,” Mr. Tien said.
Like Mr. Tien, Mrs. Nguyen Thi Minh (Cau Giay, Hanoi) also said that she has just withdrawn over VND 4 billion from savings to buy an apartment building in Cau Giay district.
Many investors are shifting to buying apartment buildings instead of villas for easy rental. (Illustrative image).
At this time, savings interest rates are very low, while the selling price of apartment buildings is good, so I decided to withdraw savings to buy an apartment building,” Mrs. Minh said.
According to Mr. Nguyen Minh Duc – real estate broker in Hanoi, currently, many people have available funds and want to make long-term investments, they still choose apartment buildings because they bring good profits from rental income and price increases. In the current period, apartment buildings still have a more stable profit level than some investment channels such as stocks, gold…
“Currently, the income growth rate of the people cannot keep up with the house price growth rate. Prices are skyrocketing, so future apartment building projects will have high prices because the costs of investors are pushed up. Many young families in the city tend to rent apartments because their finances are not enough to buy houses,” Mr. Duc affirmed.
According to the Consumer Sentiment and Trends (CSS) report by PropertyGuru, high house prices and difficult economic conditions are expected to increase the rental trend in the first half of 2024.
Among them, apartments are the most concerned type of rental property (43%), followed by private houses (18%) and boarding houses (18%). Only a small portion (9%) is interested in rental townhouses.
Mr. Le Bao Long, Director of Strategy at PropertyGuru Vietnam also commented that for investors with long-term vision, rental apartments are still an attractive investment channel because they have an average high profitability rate (combined with price increases over time and rental income), about 12.5%/year. This is a good and stable profit level compared to many other investment channels such as stocks, gold, foreign currency, land, savings…
“Accessing apartment buildings is becoming more difficult due to the income growth rate not keeping up with the house price growth rate. In the future, primary apartment building projects will have high prices because the investor’s costs are pushed up, which partially explains the trend of many young families renting houses at present,” Mr. Long analyzed.
Mr. Tran Quang Trung – Business Development Director of OneHousing also said that in Hanoi, the average selling price of primary apartments increases by 10-15% per year. On the contrary, the liquidity of investors’ capital is still “lingering” in land plots, resort real estate or low-rise houses.
“In my opinion, this is the time to invest in real estate properties that serve living needs or can be rented at a good price and wait for value appreciation,” Mr. Trung said.
Simply because with the same investment capital, villas can be rented for VND 50-60 million/month and there is no flexibility in terms of cash flow. Meanwhile, with 10 apartments, investors can earn VND 15-18 million/ apartment, with a total rental income of up to VND 180 million/month. Of course, the prices of medium and high-end apartments will also increase progressively over time.
