“Dr. Le Xuan Nghia: In the Past 34 Years, Real Estate Prices in New York, Seoul, and Paris Have Increased by About 100 Times, While in Hanoi and Ho Chi Minh City, They Have Skyrocketed by 400 Times.”

At a talk show event, Dr. Le Xuan Nghia, a member of the National Financial and Monetary Policy Advisory Council, shared his insights on the rising trend of real estate prices.

“According to surveys, real estate prices in the US and cities like New York, Seoul, and Paris have increased by about 100 times from 1990 to the present. In Vietnam, real estate prices have increased by a minimum of 100 times in remote and poor provinces, while in Hanoi and Ho Chi Minh City, they have skyrocketed by approximately 400 times,” Dr. Nghia revealed.

The expert asserted that the rate of increase in real estate prices far surpasses that of gold and stocks.

Despite the significant rise in prices, Dr. Nghia predicted that Vietnamese real estate prices would continue to climb due to limited supply, a decreasing number of projects, and the lack of solutions to revive thousands of stalled projects in Hanoi and Ho Chi Minh City.

“I believe that these projects cannot be implemented further due to financial constraints on the part of the investors and legal procedures. When investors don’t have the funds, they cannot pay the land use tax,” he explained.

Dr. Nghia added that while the comparison between the price increases of gold, stocks, and real estate might seem alarming, it is not entirely fair. In the stock market, the rate of price increase is averaged out, and there will be stocks that surge rapidly before disappearing from the market.

Data from the Ministry of Construction’s Q2 2024 real estate market report indicated that real estate prices, including apartments, detached houses, land plots, and villas, have been on an upward trend.

Specifically, in Hanoi and Ho Chi Minh City, apartment prices increased by an average of 5% to 6.5% in Q2 and 25% year-on-year, depending on the area and location. The price increase was observed not only in new projects but also in older apartments that have been in use for many years.

Additionally, Savills Vietnam’s Q2 2024 report highlighted that, since 2020, average primary prices have risen by 18% annually, while secondary prices have increased by 14% per year. As of mid-2024, primary apartment prices reached VND 65 million per square meter, representing a 10% increase quarterly and a 24% surge annually. Notably, Savills recorded no new supply below VND 45 million in Q2 2024.

Amid the rising primary apartment prices, Mr. Nguyen Quoc Khanh, Vice Chairman of the Vietnam Real Estate Brokers Association (VARS), shared that in his 15 years of experience, he never expected outer-city apartment prices to reach VND 60-70 million per square meter.

Commenting on future real estate prices as three laws on real estate take effect, Professor Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, stated, “Certainly, real estate prices will rise sharply. However, this will be an initial burden on the economy, as the input costs for land will need to be reconsidered.”