Apartment Prices Soar Amidst Concerns of Inflation
According to Mr. Hoang Hai, Director of the Department of Housing and Real Estate Market Management (Ministry of Construction), the real estate market in the first quarter of 2024 witnessed a continued surge in demand for apartments among homebuyers and long-term investors.
A survey conducted by research organizations indicates average apartment prices in Hanoi and Ho Chi Minh City ranging from $50 to $70 per square meter.
In Hanoi, apartment prices have shown a steady increase in both the primary market (sales by developers) and the secondary market (resales).
First-quarter quarterly press conference of the Ministry of Construction on April 26. (Photo: Hong Khanh)
For example, the average price increase in some projects during the first quarter of 2024 includes: Chung cư 536A Minh Khai (Hai Bà Trưng) increased by approximately 3.8% (up to $43.7 million/m2), Ha Do Park View (Cầu Giấy) increased by approximately 3.3% (up to $49.9 million/m2), Sunshine Garden (Hai Bà Trưng ) increased by approximately 3.8% (up to $45.9 million/m2), Vinhomes Nguyễn Chí Thanh (Đống Đa) increased by approximately 4.2% (up to $72.4 million/m2), and more.
Furthermore, the survey found that apartment projects completed within the past 5-10 years, including old high-rise residential buildings, have also experienced significant price hikes. Apartment prices in Hanoi have increased by approximately 38% since 2019.
However, Mr. Hai noted that some apartments with exorbitant price increases have seen minimal to no transactions.
In Ho Chi Minh City, apartment prices on the secondary market have exhibited an upward trend compared to the previous quarter, with notable increases in districts such as District 7, Tân Phú, Tân Bình, and Phú Nhuận.
Projects such as Thủ Thiêm Green House (District 2) have prices ranging from $25.5 to $30 million/m2, Happy City (Bình Chánh District) from $23 to $27 million/m2, and Garden Gate (Phú Nhuận District) from $58.8 to $69.5 million/m2.
In response to a question about whether the prolonged shortage of supply has contributed to the surge in real estate prices, including apartments, Mr. Hoang Hai acknowledged that there have been instances of price inflation in specific markets.
According to Mr. Hai, the lack of supply is compounded by imbalances in real estate product offerings. Luxury apartments account for a large proportion, while affordable housing options and housing for low-income earners remain scarce.
Old 5-10-year-old apartments in Hanoi are facing high price inflation but have very few transactions and almost no deals happening. (Photo: Hong Khanh)
The Director of the Department of Housing and Real Estate Market Management emphasized that resolving the supply issue requires addressing five bottlenecks: regulations, funding, information, and more. He expressed optimism that once the revised laws take effect, these bottlenecks will be removed, and supply will improve.
Land Plots Thrive, Land Auctions Surge
In other real estate segments, such as detached houses, townhouses, and project land plots, the Ministry of Construction reported an increase in demand during the first three months of the year compared to the previous quarter and the same period in the previous year.
Selling prices in Hanoi have risen by approximately 5-15% since the end of 2023 (ranging from $80 to $220 million/m2) and in Ho Chi Minh City (ranging from $90 to $250 million/m2).
Meanwhile, the villa and townhouse market in Ho Chi Minh City has not experienced significant positive developments. Market absorption rates remain at 20-30%, with no notable changes compared to the previous quarter.
In various other localities, products priced below $5 billion have seen a 3-5% increase in transactions since the end of 2023.
For instance, in Hà Nam, the market has shown promising signs of recovery in the land plot segment, with prices around $2 billion per plot thanks to newly approved planning, a strategic location adjacent to Hanoi, and significant infrastructure investments.
After the Tết holiday, several areas saw slight price increases and active trading; local authorities have also organized more land auctions in new urban and residential areas compared to the same period in 2023.
In Hanoi, hundreds of land plots in Chương Mỹ, Đông Anh, Sơn Tây, and Mê Linh, among others, were successfully auctioned.
The Ministry of Construction believes that these developments could contribute to further stimulation of the land market in the near future.
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Hanoi Yet to Report Unusual Apartment Price Increases During the press conference, Deputy Minister of Construction Nguyen Van Sinh revealed that the Ministry had recently issued a document requesting the Hanoi People’s Committee to investigate and examine real estate trading activities within its jurisdiction, particularly in projects and apartment complexes experiencing unusual price increases. The Hanoi People’s Committee was instructed to take measures to address and manage price gouging, speculation, and violations of real estate laws (if any). The Hanoi People’s Committee was expected to finalize and submit a report to the Ministry of Construction by April 20. However, as of now, Hanoi has not submitted a report on this matter. |
Hong Khanh
