Illustrative image.
A survey revealed that the primary apartment prices in Hanoi have been ranging between 50 and 80 million VND per square meter in recent launches, with luxury projects even reaching 80 to 230 million VND per square meter. In contrast, secondary apartment projects (old apartments that have been resold) have witnessed a steep increase since the end of 2023 but still offer more affordable prices, ranging from 30 to 70 million VND per square meter. This price range is more accessible to those looking for a home to live in.
The scarcity of new condominium launches and the high prices have driven those in need of housing to turn to the secondary market, seeking out projects that are already 5 to 10 years old. This demand has paved the way for investors and brokers with financial prowess to enter the condominium segment. However, the prices of apartments that have changed hands multiple times can be challenging for genuine homebuyers.
Mr. Minh Duc shared his experience of searching for an apartment in Hoang Mai: “In June, I viewed an apartment that a broker offered for 3.6 billion VND. In September, another broker showed me the same apartment, which had been repainted and furnished with basic furniture, now listed at 4 billion VND.”
Investors/brokers are buying old apartments, renovating them, and selling them at higher prices. (Illustrative image)
According to Mr. Duc’s understanding, the original owner had initially listed the apartment for sale for over three months without finding a buyer, so they decided to lower the asking price by 200 million VND to 3.4 billion VND. Subsequently, the apartment was sold to an investor who installed basic furniture, renovated it, and relisted it for 4 billion VND just a month later.
“Fortunately, I had seen the apartment before the renovations, so I was aware of its initial condition. If I had viewed it after the investor’s improvements, I might have been swayed by its clean and modern appearance, redesigned to match current tastes and functional needs,” Mr. Duc shared.
Mr. Duy Hieu encountered a similar situation. In May, he viewed an apartment in Thanh Tri district listed at 3.2 billion VND. “As the broker was showing me the apartment, the owner informed us that they had just received a deposit from another buyer. However, my broker later discovered that the apartment was initially offered at a lower price, and another broker had purchased it for investment. This broker renovated it and resold it for an astronomical price of 4 billion VND within less than three weeks,” Mr. Hieu explained.
In other cases, apartments were relisted with price increases ranging from 500 million to nearly 1 billion VND, even without any renovations. For instance, a 115-square-meter apartment on Nguyen Trai Street is currently listed for 6.3 billion VND. Just two weeks ago, the same apartment was advertised for 5.6 billion VND. It is understood that the owner initially offered the apartment for sale in a residents’ group, where an investor promptly purchased it at a lower price than the market value. By dealing directly with the owner and avoiding broker fees, the investor was able to buy the apartment and immediately relist it for a profit of 700 million VND.
According to real estate brokers and offices, investors who had previously focused on land in the provinces returned to Hanoi at the end of 2022 and started investing in the city’s condominium segment. Many of them are now hunting for old apartments to renovate and sell, aiming to profit from the price difference.
Ms. Cao Dung, a broker in Thanh Xuan, Hanoi, shared that most projects in the condominium segment are now adopting the rumor pricing strategy, where the expected price, not the official one, is released by the developer through sales channels. This price is set 3-5 years ahead of the market to maximize profits.
This approach has made the strategy less appealing to investors and speculators, as the opportunity for quick profits through price fluctuations is diminished. As a result, investors are turning to older apartments priced between 3 and 4 billion VND with smaller areas for investment. They allocate a moderate renovation budget, aiming for a profit margin of 200 to 300 million VND per apartment.
However, according to Ms. Dung, investing in old apartments has become more competitive since the end of 2023. This is partly due to the increasing number of investors entering this segment and the rising prices of old apartments, which have narrowed profit margins.
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