In 2013, Mr. Nguyen Huu Thang’s family from Ha Nam province purchased a 98-square-meter apartment with three bedrooms and two bathrooms in the Dinh Cong area (Phuong Liet ward, Thanh Xuan district) for over VND 900 million, equivalent to VND 9.5 million per square meter. After living there for 11 years, Mr. Thang, with his business plans in mind, decided to sell his apartment.
“Three months ago, a family on the same floor as us, with the same apartment size, sold their unit for VND 3.5 billion, equivalent to nearly VND 36 million per square meter. When we recently listed our apartment for sale, a real estate agent came to collect information and suggested listing it at VND 4 billion. When asked about the reason for the high price, the agent attributed it to the current market trend, explaining that prices have increased significantly,” shared Mr. Thang.
According to Property Guru Vietnam, apartments in the Dinh Cong area with an area of 98 square meters are being advertised for sale at VND 4 billion, equivalent to VND 40 million per square meter. However, in reality, prices are much higher and can reach up to nearly VND 50 million per square meter. A real estate agent attributed this to improved infrastructure and transportation connections in the area, stating, “The opening of the road connecting Dinh Cong and Giap Bat has significantly increased the value of old apartments in this area.”
Hanoi’s old apartments are seeing rising prices. (Illustrative image)
At Eco Green Apartments (Nguyen Xien street, Thanh Tri district), a 95-square-meter apartment with three bedrooms and two bathrooms, fully furnished, is being advertised by an agent for VND 5 billion, with no room for negotiation. The apartment owner is offering a VND 20 million bonus to the buyer for the red book transfer fee. Eco Green Apartments were inaugurated in 2017, so despite being in use for seven years, the selling price is nearly VND 53 million per square meter, comparable to that of new buildings.
Another old apartment located in the social housing area of Linh Dam peninsula is being advertised for sale at nearly VND 38 million per square meter. Specifically, a 77-square-meter apartment with three bedrooms and two bathrooms, with old wooden floors, a deteriorating gypsum ceiling, and basic furniture, is listed at VND 2.9 billion.
It’s not just old apartments in the inner-city districts that are seeing price increases. According to many homebuyers, old apartment prices in outlying districts such as Thanh Tri, Dong Anh, and Hoai Duc have also surged recently. Mr. Tran Nguyen Vu from Nam Dinh province shared that for over a year, he has been tirelessly searching for a suitable apartment within his family’s budget of VND 2 billion, but to no avail.
“After a while of searching and viewing properties, my family was discouraged by the extremely high prices quoted by agents. There are projects that my family has considered, which have been in use for decades and are located in outlying areas near the Ring Road 3, but the asking prices are still exorbitantly high, at around VND 50 million per square meter. For an 80-square-meter apartment, the price would be VND 4 billion, double the amount my family can afford. As a result, we have temporarily put our home-buying plans on hold,” said Mr. Vu.
Limited supply contributes to sustained high prices for old apartments
According to Savills Vietnam experts, the limited supply and an imbalance in product availability in recent years have been the main factors driving the continuous increase in apartment prices, including those of old apartments. Mr. Su Ngoc Khuong, Senior Director of Savills Vietnam, pointed out the shortage of affordable and luxury housing options in the market.
“Many projects are still facing legal hurdles to commence construction. Additionally, land funds and development costs also play a role in keeping prices high across all segments,” he added.
Mr. Nguyen Van Dinh, President of the Vietnam Real Estate Brokers Association (VARS), also predicted that due to high demand and the scarcity of social housing, the prices of new and old apartments would continue to rise in the future.
“The limited construction of new apartments will lead to sustained price increases in the city centers of major cities, especially in the affordable and middle-class segments. Consequently, the rising prices of new projects will also push up the prices of old apartments in the near future,” Mr. Dinh assessed.
To improve the price situation in the apartment market, Mr. Dinh suggested that the first step is to increase the market’s supply. “To cool down the prices of apartments, including old ones, we need to develop more social housing at affordable rates. This will help bring down the average selling price of apartments, enabling those with genuine needs to purchase their homes,” he concluded.
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