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The Ever-Changing Landscape of Hanoi’s Social Housing: From Affordable to a Few Billion Dreams

2 November, 2024

Prices Triple After More Than 5 Years

Apartments in social housing projects were once considered a “lifesaver” for families with limited finances and low incomes. However, many of these apartments, initially sold over five years ago, are now being resold by their owners at extremely high prices, more than triple their original cost.

Mr. Quoc Anh from Cau Giay, Hanoi, shared with reporters that he and his newlywed wife were looking to purchase a 60-70sqm apartment within Hanoi’s inner city with a budget of up to VND 3 billion. After finding that similarly-sized commercial apartments were priced at VND 4-5 billion, they decided to explore social housing options.

However, a 69sqm, 2-bedroom apartment in a social housing project in Hoang Mai district, which a real estate broker recently showed them, was listed at VND 52 million/sqm, equivalent to VND 3.6 billion. Other apartments in the same area were advertised at prices ranging from VND 47-53 million/sqm, depending on their size and location.

The challenges of buying an apartment in Hanoi. Photo: Tien Anh

Mr. Quoc Anh commented that the current asking price of VND 52 million/sqm was too high, considering that the original owner had purchased the apartment for only VND 16 million/sqm, and the infrastructure had deteriorated over the past five years.

He added that the current owner had recently bought the apartment from the first owner and had paid all the necessary taxes, essentially converting it into a commercial property. The apartment now had all the necessary legal documents, and the new buyer would only need to pay an additional VND 30 million in name transfer fees to become the official owner.

“Even those with moderate incomes are struggling to afford these homes, let alone those with low incomes.”

Ms. Thanh, a resident of the social housing project Dong Mo in Dai Kim, Hoang Mai, Hanoi, said that the rapid increase in housing prices had made it difficult for even moderately-income families to afford these homes, let alone those with low incomes.

She worried that at this rate, social housing prices would soon catch up to commercial apartment prices.

Mr. Nguyen Hoang Nam, CEO of G-Home, shared that while commercial apartment prices typically ranged from VND 60-70 million/sqm, social housing apartments had also seen a significant increase, now costing VND 45-50 million/sqm.

For example, apartments in the Rice City Linh Dam social housing project in Hoang Mai, which were delivered more than seven years ago, now had prices reaching VND 50 million/sqm. This was more than three times their original selling price of VND 15 million/sqm when the project was first launched. Similarly, apartments in the 987 Tam Trinh building in Hoang Mai were being advertised at VND 54 million/sqm, compared to their initial price of just over VND 20 million/sqm.

Likewise, some apartments in the Ecohome 3 Co Nhue social housing project in Bac Tu Liem were being offered at prices exceeding VND 53 million/sqm. A 63sqm apartment in this project was listed at VND 3.2 billion, which was VND 30-35 million/sqm higher than its original selling price of VND 16.5 million/sqm in 2019.

The “cheapest” option was found in the NHS Phuong Canh social housing project, where prices ranged from VND 32-38 million/sqm. For instance, a 65sqm apartment in this project was priced at VND 2.5 billion, equivalent to VND 38 million/sqm.

However, the steep rise in social housing prices has not brought joy to those who already own these homes.

Mr. Minh, a resident of Hoang Mai, Hanoi, shared that he had purchased a 66sqm apartment for VND 1.1 billion, or approximately VND 16 million/sqm. After five years, due to an expanding family and the deteriorating condition of the apartment, he wanted to move to a different apartment but found himself “stuck.” “I’ve been searching for a long time, but I can’t find anything within our budget,” he said.

Mr. Quang Thanh, a real estate broker with 15 years of experience in Hoang Mai, explained that while social housing projects initially offered very affordable prices for young families with limited finances, many owners were now reselling their apartments at much higher prices, comparable to commercial apartment prices.

“There are also investors who buy these apartments, make minor improvements, and then resell them as soon as they see a profit, which contributes to the overall increase in prices,” he added.

According to Mr. Nguyen Hoang Nam, CEO of G-Home, it is entirely legal for owners of social housing apartments to resell their properties after five years, as long as they pay the necessary personal income taxes. He emphasized that while the policy of supporting disadvantaged people in accessing social housing is commendable and should be encouraged, owners who later sell their properties as commercial apartments should offer prices that reflect the actual value of the apartments.

Tien Anh