The Rising Trend of Apartment Prices

Just Sold Out and Can’t Afford to Buy Another Home

Ms. Minh Ngoc from Long Bien, Hanoi, shared that she had just received a deposit for selling her 72m2 apartment at the Hanhome project (Long Bien, Hanoi). Three years ago, she bought this apartment for VND 24.5 million/m2.

In March 2024, a real estate broker offered to buy it at VND 32 million/m2, but Ms. Ngoc refused to sell. A few weeks ago, the broker contacted her again with an increased offer of VND 40 million/m2.

“The buyer had to bear all the name transfer and brokerage fees. Including all the costs after the name transfer, the selling price of my apartment was nearly VND 42 million/m2. I agreed to sell and accepted the buyer’s deposit as they were very eager to purchase, despite it being the seventh lunar month,” Ms. Ngoc said.

Surprisingly, just one week after selling her apartment, Ms. Ngoc was informed by another broker that the selling price had increased by over VND 100 million compared to the price she sold it for.

“After selling my apartment, I tried to find another one in Cau Giay district with the same area, but to no avail. All the projects I knew of were priced at over VND 70 million/m2,” Ms. Ngoc said.

Ms. Tuyen from Hoang Mai, Hanoi, was also surprised that her social housing apartment in the Dai Kim Social Housing Project (Hoang Mai, Hanoi) suddenly became a hot target for many brokers, with the offered price reaching nearly VND 50 million/m2.

“I never thought that social housing, which has been downgraded for many years, would experience such a significant price increase. I bought this 69.9m2, 2-bedroom, 1-bathroom apartment for VND 1 billion. In early 2024, a buyer offered VND 2.7 billion, but I didn’t sell it,” Ms. Tuyen said.

As she needed money, she put the apartment up for sale in mid-August and was surprised that a buyer agreed to the deal just one day after viewing the property, offering an additional VND 500 million to the asking price. “After living here for many years, I still made a profit of nearly VND 2 billion from selling this apartment,” she added.

However, Ms. Tuyen mentioned that there are rarely any social housing units for sale in her area. Whenever there is a unit available, it is quickly snapped up by buyers. This price increase trend is not limited to commercial apartments or resold social housing; even new apartment projects that are currently open for sale have prices exceeding VND 70 million/m2.

Currently, it is challenging to find new apartments with an area of 60-70m2 priced below VND 3 billion. Some projects in the western region of Hanoi, located 20km from the city center, are offered at over VND 100 million/m2, and buyers still have to wait in line for their turn.

“I Don’t See Any Factors That Could Lead to a Decrease in Property Prices”

According to the leader of the Housing and Real Estate Market Management Department (Ministry of Construction), condo prices increased by 5-6.5% in Q2/2024 compared to the previous quarter. This figure represents a 25% year-on-year increase.

This price hike is observed not only in new projects but also in apartments that have been in use for many years. However, the number of condo transactions showed a decreasing trend compared to Q1/2024, as prices have reached high levels, and buyers are adopting a wait-and-see attitude.

In Q2/2024, there were nearly 25,890 transactions of apartments, detached houses, and land plots, a decrease of 27.8% compared to Q1/2024 and 13% compared to the same period last year.

According to data from the Research Center for Market and Customer Understanding OneHousing, as of Q2/2024, the average primary apartment price in Hanoi reached approximately VND 65 million/m2, a 25% increase quarterly and a 29.8% increase yearly. Notably, the western region of the capital city has the highest prices in the market, at about VND 70 million/m2, while the eastern region has slightly lower prices, at around VND 56 million/m2.

Mr. Tran Quang Trung, Director of Business Development at OneHousing, pointed out that the supply of new projects is currently limited, with a projected total supply in Hanoi for 2024 of only about 22,000 units.

Meanwhile, the city welcomes approximately 160,000 new residents each year, creating a substantial demand for housing. In addition, Vietnam is witnessing one of the fastest-growing middle-class populations globally, further increasing the demand for mid-range and high-end housing.

To meet this demand, developers are focusing on developing projects in this segment, which, in turn, pushes up condo prices.

Mr. Trung predicted that with the continuous increase in input costs, from land to design, construction, landscaping, and amenities, it would be challenging to expect a decrease in condo prices.

Furthermore, current developers are mainly focusing on large-scale urban areas, which come with higher development costs, resulting in higher selling prices. The forecast for the upcoming period does not indicate any significant improvement in supply.

It is expected that by 2025, the supply will reach 23,000 units, and by 2026, it will increase to 24,000 units. According to Mr. Trung, it is challenging to anticipate a decrease in apartment prices, especially in the current context. In 2024, 2025, and 2026, he does not foresee any factors that could lead to a decline in condo prices.