“Once Shunned for Its Cemetery Proximity, This House Now Commands Over $9,000 per Square Meter”

Homes Near Cemeteries See Steady Price Increases

In recent years, property prices in Hanoi have soared, making homeownership increasingly challenging for many. Even homes adjacent to cemeteries, once shunned by buyers, now command prices of hundreds of millions of dong per square meter.

Along Le Van Luong Street in Hanoi, a condominium complex with direct views of a cemetery initially raised feng shui concerns. However, units now sell for 70-80 million dong per square meter. A typical two-bedroom apartment of 80 square meters in this development ranges from 5.6 to 6.4 billion dong. Notably, many units here still lack land-use rights certificates despite being delivered years ago.

In Hoang Mai district, another condominium project offers prices between 70-94 million dong per square meter. Two-bedroom units, sized 60-70 square meters, are priced around 5 billion dong.

In the Giap Nhi area of Hanoi, homes are surrounded by graves, with some even located in front of gates or between houses. Despite this, prices in the alleyways range from 200-260 million dong per square meter. For instance, a 31-square-meter house is listed at 230 million dong per square meter, totaling over 7 billion dong. The seller notes that despite the graves, no unusual incidents have been reported by residents.

Mr. Nguyen Truong Giang, owner of a real estate agency in Hanoi, recently facilitated the sale of a 33-square-meter house in Tu Liem district for 7 billion dong, or over 212 million dong per square meter. The property faces a long-standing grave.

He explains that the house had been on the market for six months, with many potential buyers hesitant to commit. However, this drawback allows buyers to negotiate better prices with sellers.

Historically, many buyers avoided such properties. However, amid rising property prices, some are now willing to compromise for more affordable options. Nonetheless, liquidity for these properties remains low.

According to recent reports, Hanoi’s property prices continued to climb in the third quarter, making homeownership an increasingly distant dream for many.

How Can Housing Prices Be Controlled?

Dr. Can Van Luc, Chief Economist at BIDV and a member of the Prime Minister’s Policy Advisory Council, attributes the price surge to escalating costs. He highlights that land and site clearance expenses now account for a larger share of project costs, especially as new land price schedules align more closely with market rates, significantly increasing financial obligations.

Additionally, rising construction material costs, labor expenses, and bank loan interest rates collectively inflate project development costs. These increases are ultimately passed on to buyers, preventing price reductions.

Many experts also cite land price schedules and land-use fee calculations as direct contributors to higher prices. Adjustments to bring land prices closer to market rates have sharply increased land-related financial obligations, further driving up costs.

Mr. Tran Quang Trung, Business Development Director at OneHousing, notes that the real estate market is imbalanced in terms of supply. However, this imbalance does not indicate oversupply; rather, it reflects the market’s composition of four main segments: affordable, mid-range, luxury, and high-end.

From 2023 onward, the affordable and mid-range segments have been nearly absent from the market. Specifically, there have been virtually no new affordable housing projects, and the mid-range segment, which caters to the majority of society, has also seen no new developments.

In contrast, luxury and high-end segments dominate the market. Despite this concentration, demand for these properties remains strong, with units selling quickly.

According to Mr. Trung, this imbalance has pushed average condominium prices in Hanoi to 85.6 million dong per square meter. In comparison, this figure was only around 50 million dong per square meter in 2022. The shortage of affordable and mid-range housing has elevated overall price levels.

“If future developments increase supply in these two segments, the average price will naturally stabilize. Compared to Ho Chi Minh City, Hanoi’s property prices are now nearly on par. Before 2021, Ho Chi Minh City’s prices were consistently higher, but this gap has virtually disappeared,” Mr. Trung observes.