“Passive Income: Earn Billions from Your Apartment Without Lifting a Finger”

Apartments That Generate Passive Income

Recently, Ms. Thuy, an owner of an apartment at Vinhomes Green Bay, has been receiving frequent messages from real estate agents informing her of potential buyers. What truly surprised her was that the 2-bedroom apartment she purchased 7 years ago for 3 billion VND has now skyrocketed to nearly 9 billion VND, almost tripling in value. The price surge was so staggering that even she exclaimed, “Astonishing, I can’t fathom why it’s risen so much.”

This astonishment isn’t limited to current owners; it also leaves those who sold earlier with regrets. For instance, Ms. N, a small business owner in Hanoi, sold a 3-bedroom apartment in the same project for 7 billion VND in early 2024 to pay employee salaries and fund company projects while awaiting overdue payments from the developer.

Just over a year later, the apartment’s value soared to 14 billion VND, tripling in price. Meanwhile, her company’s investments haven’t fully recovered, even incurring a 20% loss due to rising material, labor, and operational costs.

“Sometimes I don’t know whether to feel happy or sad. I console myself by thinking at least I’m providing jobs for society. There are moments when simply sitting still, doing nothing, helps preserve wealth,” Ms. N reflected.

Why Are Condo Prices Surging?

According to a CBRE report, in Q2, the average primary sale price for apartments in Hanoi reached approximately 79 million VND/m², while in Ho Chi Minh City, it was 82 million VND/m², a significant increase from 46 million VND/m² in Hanoi and 60 million VND/m² in Ho Chi Minh City in Q1 2023.

Explaining the rapid rise in apartment prices, Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), attributed the surge in urban housing prices primarily to the scarcity of affordable options.

“The limited supply is due to many low-cost projects being stalled. When they resume, prices have already soared. Legal hurdles account for over 70% of these delays, preventing many projects from proceeding,” he analyzed.

According to Mr. Chau, the market is currently experiencing a “reverse pyramid”: High-end apartments, priced at 70 million VND/m² and above, dominate the market, while affordable housing has nearly disappeared for years.

Mr. Chau expressed hope in the upcoming legal framework revisions, particularly the Land Law, to facilitate land-use conversions from agriculture and industry to residential development. “With more cleared land, new supply will increase, naturally cooling housing prices,” he stated.

Additionally, he emphasized the need to accelerate social housing programs. “The government must expedite progress and encourage companies to develop social housing to stabilize prices and ensure citizens have access to housing,” the HoREA Chairman urged.

Alongside policy measures, Mr. Chau also stressed the importance of reducing input costs: from land-use fees, construction costs, and materials (sand, steel, cement, fuel) to legal compliance expenses. “Especially the opportunity costs due to prolonged administrative procedures,” he highlighted.

From a real estate developer’s perspective, Mr. Nguyen Tan Thanh, Vice Chairman of BV Group’s Board of Directors, noted that high housing prices stem from multiple factors, including land costs and market-based land valuation methods that are already elevated.

Mr. Thanh emphasized another significant factor: the recent sharp rise in material and labor costs. “Sand and brick prices have surged since the beginning of the year, and labor costs have escalated. This is due to accelerated public investment, leading to shortages in both materials and labor, compounded by inflation,” he explained.

Moreover, stricter design standards have inflated costs. Fire safety, corridor, and emergency exit regulations have reduced commercial floor space. Mr. Thanh noted, “On a single floor, only about 70% of the area is sellable. Factoring in the mandatory 20% parking space, the actual sellable area is just over 50% of the total built-up area.”

He illustrated with an example: “If construction costs are 15 million VND/m² but only half the area is sellable, the actual cost per square meter doubles to over 30 million VND/m². Adding land costs of around 30 million VND/m², the selling price reaches 60 million VND/m², excluding marketing, sales, and corporate loan interest expenses.”

According to BV Group’s leadership, reducing housing prices requires addressing each cost component. “Land is one aspect, and streamlined procedures and policies are another to help companies bring products to market. Design standards, material costs, and labor expenses also need adjustments. If each factor is reduced slightly, housing prices could significantly decrease,” Mr. Thanh proposed.

Government Demands Answers

Addressing the rising real estate prices, Prime Minister Pham Minh Chinh demanded answers to why “condo prices keep soaring and remain high.” At the first meeting of the Central Steering Committee on Housing Policy and Real Estate Market on September 22, he highlighted the housing segment’s inadequacies, with high-end products dominating and prices occasionally spiking, especially in major cities.

He also called for clarity on whether the real estate market is being manipulated to address hoarding, price gouging, and market distortions. The Prime Minister stressed the need for answers to the persistent rise in condo prices.

“So many people need housing but can’t afford it due to high prices. Condos priced at 70 million or 100 million VND per square meter are beyond most people’s reach,” he stated at the meeting.

Prime Minister Pham Minh Chinh emphasized that the real estate market is a crucial capital mobilization and allocation channel with significant economic impact, contributing to improved living standards. However, challenges related to land, bidding, site clearance, and resettlement persist.

He affirmed that developing the real estate market and social housing is a major issue, requiring comprehensive and effective solutions through close coordination between central and local authorities, the state and businesses, and citizens.

Prime Minister Pham Minh Chinh reiterated the Party and State’s clear stance: Never sacrifice fairness, progress, and social welfare for mere growth. Ensuring citizens’ right to housing aligns with the principle of “settled life, prosperous work.”