The real estate market in 2024 is experiencing unpredictable developments. In particular, some segments such as land and apartments are increasing in price sharply. In particular, apartment prices in Hanoi, Ho Chi Minh City, etc. are continuously climbing, not only increasing sharply in the inner city but also apartments and land in the suburbs are also increasing rapidly.
In Hanoi, the market is recording dozens of projects with new products for sale (including old and new projects). According to the survey, most of the newly opened supply is in the high-end and luxury segments, lacking products in the mid-range and affordable segments.
Commercial housing for sale at prices below 35 million VND/m2 no longer appears, the market no longer has primary products in this segment.
The average price of primary products in Hanoi is currently quite high, ranging from 60-120 million VND/m2. Some high-end apartment projects in the suburbs of Hanoi are even being offered for sale at hundreds of millions of VND/m2. In the inner city districts of Hanoi, the market has recorded some projects being opened for sale with the highest price of up to nearly 300 million VND/m2.
The Vietnam Association of Realtors (VARS) said that the affordable apartment segment (priced under VND25 million/m2) - "affordable" housing - has become "extinct" in the past few years and is very difficult, or even impossible, to reappear in Hanoi and Ho Chi Minh City.
Newly launched projects have high and continuously increasing selling prices. In the first 9 months of 2024, the supply of apartments in Hanoi witnessed a significant recovery, but the imbalance between supply and demand became even more serious when about 80% of the supply of apartments launched in Hanoi and Ho Chi Minh City in the first 9 months of 2024 had selling prices from 50 million VND/m2 or more.
This situation causes apartment prices to continuously increase and establish a new level, at a high level in both the primary and secondary markets, far beyond the affordability and income growth rate of the majority of people.
Assessing the cause, experts said that the price of land and apartments in big cities such as Hanoi, Ho Chi Minh City, etc. increased sharply and abnormally high in the context that the basic factors that create the price of apartments such as: Land use fees, construction materials, labor, etc. did not increase much. Meanwhile, in some localities and areas, there was a phenomenon of auctioning land use rights with the winning bids many times higher than the starting price.
Mr. Nguyen Quoc Hiep - Chairman of the Vietnam Contractors Association - said: "Many apartment projects cost up to 500 million VND/m2. This is an "unreasonable" price but the reason is due to high land prices. Land prices currently account for up to 40% of real estate product prices. Real estate prices in Vietnam are higher than in the region" - Mr. Hiep said.
According to Mr. Nguyen Quoc Hiep, the rapid increase in apartment prices in recent times is partly due to land prices. This is a problem that needs to be addressed by management agencies to promote the market from the perspective of people who want to buy houses in order to manage house prices.
The growth in liquidity in some segments in 2024 could create a recovery momentum for the real estate market. However, if the “virtual” increase in real estate prices is not intervened early, it will lead to many consequences for the market and for society.
