Buyers accept to purchase at “peak prices” out of fear of further increases
Since the end of last year, apartment prices have been rising rapidly, creating a “price fever” in the market. This price increase is not limited to new projects but also to previously owned ones. Although the fever has cooled down, prices remain high.
Ms. Hien, an office worker in Hanoi, has just purchased an apartment in Vinhomes Smart City for VND 2.5 billion, measuring over 50 square meters. Despite knowing that apartments are currently at their “peak prices,” she and her husband decided to take out a bank loan for an additional VND 800 million to secure the property.
“Once we identified the suitable area, I contacted many real estate agents. However, for the same apartment, each agent quoted a different price, which confused me greatly. Moreover, the asking price increased every week, causing us to panic. After a month of chaos in the “maze” of property prices, my husband and I decided to borrow more money to make the purchase,” Ms. Hien shared.
Many others, like Ms. Hien, are aware of the high prices but still determined to buy an apartment as soon as possible. For instance, Mr. Hung’s family, after almost three years of renting, also recently took out a bank loan for VND 1.5 billion to purchase an apartment at the end of July. Combined with their savings of nearly VND 2 billion, they signed a contract for an apartment priced at over VND 3.5 billion in Nam Tu Liem District, Hanoi.
Mr. Hung shared that they had planned to buy a house for a long time but kept delaying it due to various reasons. However, at the beginning of 2024, with the volatile property prices and forecasts of further increases due to the new Laws on Housing, Land, and Real Estate Business taking effect, they decided to accelerate their home-buying process.
The fear of “missing out” is understandable in the current context, as many recent predictions indicate an increase in real estate prices, especially with the influence of the new laws. Therefore, many hesitant buyers are now seizing this opportunity to make their purchases.
Experts predict that apartment prices in Hanoi will continue to rise in 2024-2025.
Forecasts indicate further increases in apartment prices
According to the OneHousing Research Center for Market Research and Customer Understanding, in the first half of 2024, Hanoi recorded more than 52,000 transactions, with apartments (both primary and secondary) accounting for 54%.
There was an increase in new supply, transaction volume, and unit prices. Specifically, Hanoi’s primary supply in Q2/2024 increased for the fifth consecutive quarter, reaching nearly 8,400 units, a 97% increase from the previous quarter and a 340% year-on-year increase. Favorable macroeconomic factors and the consecutive launch of new projects drove the highest quarterly supply since 2020.
The new supply in Q2 mainly belonged to the luxury and ultra-luxury segments, accounting for 97% of the total market. The affordable segment was absent, and the mid-range segment accounted for only about 3%. Future supply is expected to come mainly from the eastern and western parts of Hanoi, where new subdivisions and projects are being developed on a large scale.
Apartment transactions increased in both volume and selling prices. Compared to Q1/2024, the number of transactions in Q2/2024 increased by 49%, and the average selling price rose by 21%.
Mr. Tran Minh Tien, Director of the OneHousing Research Center for Market Research and Customer Understanding, assessed that the three real estate laws taking effect have laid the foundation for the apartment market in Hanoi to continue growing in the second half of 2024 and subsequent years. The signals in Q2 indicate that the apartment market has strongly recovered after five consecutive quarters of growth and is entering a new growth phase.
Sharing his views on apartment prices, Mr. Le Dinh Chung, CEO of SGOHomes, stated that Hanoi apartments are experiencing an abnormal price increase, with an average price of about VND 60 million per square meter. This trend is not a speculative bubble but a market reality. This price surge will continue into this year and the next.
CBRE Vietnam experts predict that apartment prices will grow at a rate of over 20% per year from now until 2026—a record-high figure.
From a developer’s perspective, Mr. Nguyen Dung Minh, Deputy General Director of MIKGroup, shared that large-scale projects like Vinhomes Smart City, Vinhomes Ocean Park, and Ecopark have created significant value over the past five years. For example, four years ago, apartment prices in Vinhomes Smart City ranged from VND 40 million per square meter, and they now stand at VND 80-90 million per square meter.
“Short-term issues like limited supply impact selling prices. From now until the end of this year and early next year, the average selling price of apartments in Hanoi will continue to climb,” said the Deputy General Director of MIKGroup.
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