The prices of apartments in the city have been rising, causing many people to give up the idea of buying a condo and instead look for houses in the alleyways at a more affordable price.
Why do condo prices keep increasing?
For over 3 months now, since before Tet holiday, Mr. Phung The Anh (from Thai Binh province) has been continuously searching through housing groups, real estate websites, and directly surveying multiple projects to find a 2-bedroom, 2-bathroom condo with an area of 60 – 70m2 and a price of 2 billion VND or less, but he hasn’t been able to find one.
Condo prices keep rising, making it difficult for people to afford them. (Photo: Ngoc Thanh)
“A 69m2 condo in Gemek I located in An Khanh commune (Hoai Duc district) is being sold for 2.5 billion VND, which is equivalent to about 36 million VND/m2. Meanwhile, a used condo in Eco Green in Tan Trieu commune, Thanh Tri district is being offered for sale at prices of 43-45 million VND/m2. Newly built condos are priced from 50 – 80 million VND/m2. With these prices and the amount of money we currently have, we can only dream,” Mr. The Anh said.
Also searching for a condo, Ms. Le Phuong Uyen (from Nam Dinh province), who is working as an accountant at a food company in Hanoi, said that for nearly 6 months, her family has been continuously looking to buy a 2-bedroom condo with an area of about 60 – 80m2 and a price of about 2 billion VND, but they haven’t been able to find one.
Ms. Uyen provided examples of the price range, stating that a used condo in Phuong Dong Green Park (Tran Thu Do, Hoang Mai district) is being offered for sale at 48 million VND/m2. Another project nearby – Rose Town at 79 Ngoc Hoi with a remaining land use term of just over 30 years, has condos of 65m2 priced at over 2.6 billion VND, while long-term condos are priced at 3.1 billion VND.
“There are even older condos like Sudico My Dinh that have been handed over for over 10 years, with an average price of 3.4-3.7 billion VND for a 2-bedroom unit. Most condo prices nowadays are around 3.6 billion – 4.2 billion VND for a 2-bedroom unit. The condo prices per square meter are over 40 million VND, which is too high,” Ms. Uyen said.
According to Mr. Nguyen Van Dinh, Chairman of the Real Estate Brokers Association, the continuous increase in condo prices is due to the scarcity of condo supply in Hanoi in recent years. The number of projects is limited, while the demand from the market continues to increase, resulting in an imbalanced market structure.
“Currently, condos priced at 30 million VND/m2 have disappeared from the market. Condo prices are too high, making it difficult for people with actual housing needs to afford them,” Mr. Dinh said.
Trending towards buying houses in the alleyways
Due to the high and expensive prices of condos caused by the limited number of new projects, many people are now looking to buy houses in the alleyways for living or renting purposes.
Mr. Nguyen Huy San (from Hai Duong province) said that after 6 months of not being able to find an affordable condo, he decided to switch to buying a house in the alleyway.
Condo prices are high, leading many people to look for houses in the alleyways. (Photo: Thu Giang).
“After a week after Tet, with the assistance of real estate brokers, my family was able to buy a 42m2, 5-story house in an alleyway on Minh Khai street, with a price of 4.5 billion VND, equivalent to about 107 million VND/m2,” Mr. San said. “Buying a house on land makes me feel like a real homeowner, not dependent on the developer, not sharing the staircases and other services with others, and most importantly, not having to worry about utilities like electricity and water.”
Mr. Pham Van Nghiep (from Bac Giang province) also shifted from buying a condo to buying land, sharing that with the savings of 2.5 billion VND, condos within their budget were either too old, located about 20km away from the center of Hanoi, with an area of not more than 80m2, and were not convenient for a family of 6 people from 3 generations.
“My family decided to switch from buying a condo to buying a 48m2, 5-story house in an alleyway where motorcycles can pass each other. In addition to the 2.5 billion VND we already had, my family borrowed an additional 1.1 billion VND to own a house with 7 bedrooms, 5 bathrooms, 2 kitchens, 1 laundry area, for a family of 3 generations and 6 people to live comfortably, and with an extra room to welcome guests from our hometown,” Mr. Nghiep said.
According to evaluations by real estate businesses, since Tet holiday, the level of interest in real estate, especially houses in the alleyways, has quickly increased. Specifically, compared to the beginning of 2023, the real estate market in the early part of this year has shown positive signs, especially in terms of the level of interest and the number of property listings.
In January 2024, the demand for property searches increased by 66% compared to the same period in 2023, and the number of property listings for sale also increased by 52%. Notably, in Hanoi and Ho Chi Minh City, the level of interest in land plots and land projects increased more significantly compared to condos.
In particular, in January 2024, the search volume for land plots in Hanoi increased by 110%, and for land projects, it increased by 77% compared to the same period last year. Meanwhile, the search volume for condos in Hanoi increased by 71%. Similarly, in Ho Chi Minh City, the search demand increased by 71% – 73% for land plots and land projects, and only increased by 59% for condos.
Although there haven’t been any “land fever” occurrences like in early 2022, these numbers partly reflect the desire of many people to have their own homes.
