According to PV Tie…e high prices of real estate, exceeding the majority of people’s affordability, leading to a continued decline in market liquidity in the apartment segment.
According to a report by the Ministry of Construction, in the fourth quarter of 2023, apartments with prices ranging from 51-70 million VND/m2 accounted for 63% of new supply, increasing by 24% per year. The majority of supply in the real estate market today belongs to the segment of apartments with prices ranging from 3.5 to over 4 billion VND.
According to the latest report by the Vietnam Real Estate Brokers Association, the high prices (from developers) of apartments in the primary market are partly due to the scarcity of developers with projects. Developers with supply in this stage are mostly large developers who do not have financial difficulties, so they set high selling prices to maximize profits.
Used apartments are attractive to home buyers because of their lower prices compared to new apartments and immediate availability.
It is worth noting that there are almost no new projects with prices of 40-50 million VND/m2 in Hanoi and Ho Chi Minh City. Apartment projects in neighboring provinces and cities have also recorded prices around 40 million VND/m2. Currently, the average price of primary apartments in Hanoi is 51.7 million VND/m2 and in Ho Chi Minh City is 71 million VND/m2.
The price of primary apartments is difficult to decrease due to rising input costs (housing index and construction material prices increase by about 6% annually), inflation, and high interest rates. Meanwhile, the number of new approved commercial housing projects is increasingly scarce, and land funds in central areas are also limited.
The continuously increasing prices of new apartments from developers have left many people in need of real housing with limited options.
Ms. Minh Khue (Dong Da, Hanoi) said that she has surveyed many projects in districts such as Cau Giay, Thanh Xuan and found that the prices are all 60 million VND/m2 or higher. People in real need are shocked by the rapidly increasing prices and lack of choice.
Due to limited financial resources, Ms. Khue and her family have turned to buying used apartments that are 3-5 years old. “The prices of used apartments have also increased, but not as high as new apartments. The advantage is that we can move in immediately, while with new apartments, we have to wait 2-3 years to receive the keys,” Ms. Khue said.
According to Ms. Do Thu Hang, Senior Director of Research and Consultancy Department at Savills Hanoi, in the context of limited supply and high prices in the primary market, the opportunity for real home buyers may lie in the secondary market (buying and selling between individuals). The secondary market has the advantage of more options, better affordability, and guaranteed legal procedures.
According to many experts, the secondary housing market in Hanoi will continue to maintain stable transactions thanks to attractive prices, especially in suburban districts with lower prices compared to central areas and improving transportation infrastructure.
This trend will continue in 2024 as the real estate supply shows no signs of significant improvement and prices continue to rise. However, there are still many uncertainties, and both the overall economy and the real estate market need more time to recover in terms of supply and liquidity.
