The Vietnam Real Estate Brokers Association’s real estate market report reveals notable insights into the rising prices of real estate properties. In the second quarter, primary residential property prices continued their upward trajectory, with most new developments positioned as high-standard offerings. Some mid-range apartment projects also witnessed price hikes of 3-5% due to the dwindling supply in this segment.
According to the Association’s data, apartment prices in Hanoi, Ho Chi Minh City, and Danang during Q2/2024 surged by 58%, 27%, and 45%, respectively, compared to 2019.
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A survey of the market also reveals climbing apartment prices. Mr. Nguyen Duy Tri, a resident of Dong Da, Hanoi, shared his experience of making a VND 200 million profit within a few months of investing in an apartment. In December 2023, Mr. Tri purchased an apartment in Linh Dam, Hoang Mai, Hanoi, with the intention of “riding the market wave.” The 60m2 apartment was priced at VND 2.3 billion at the time of purchase. However, by May 2024, brokers were offering to buy the apartment for VND 2.5 billion, and now they are willing to pay VND 2.6 billion.
At the seminar “Investment Focus in the New Context,” Mr. Dang Truong Giang, Deputy General Director of Mai Viet Land, shared his insights: “From 2014 to the present, the value of apartments has continuously increased rapidly. According to CBRE, apartment prices have risen by 13-15% annually. Even now, the apartment segment shows no signs of cooling down.”
Mr. Giang elaborated that to understand the current situation of rising apartment prices and determine if it is an abnormal phenomenon, we must consider multiple factors. Typically, bubbles form due to supply and demand dynamics, with investment demand outpacing actual housing needs, price factors, monetary policies, and capital sources.
In reality, according to a survey by batdongsan.com.vn, the supply of apartments is extremely limited. For example, in Hanoi, despite continuous increases in supply, it has not kept up with the demands of the population. In other words, I believe that the shortage of supply is a key reason for the rising apartment prices, which is not necessarily abnormal. Accompanying the price increases, the demand for real estate purchases has also grown strongly, with total searches increasing by more than 10%.
Mr. Minh attributed the short-term issue of limited supply as one of the factors influencing selling prices. From now until the end of the year and the beginning of the next, average selling prices are expected to climb even higher.
