Dreaming of a home
For nearly 3 months now, Mr. Nguyen Van Quyet (born in 1989, from Thai Binh) and his wife have been constantly visiting real estate groups, consulting many real estate channels, and contacting brokers to find a house to buy in Hanoi. However, he has not yet found a suitable house to buy.
The couple saved up 1.8 billion VND, and Quyet borrowed money from his family for a total of 3.5 billion VND to buy a house. In August, a broker showed Quyet and his wife a house in a deep alley in Ha Dong district for 3.6 billion VND. After viewing the house, although he was quite satisfied, he still hesitated because the house was beyond his ability to pay. Quyet shared: "I have never felt so helpless, finding a place to live in Hanoi is really difficult. Because the current housing prices in Hanoi are too high, far beyond my ability to pay."
In the same situation as Mr. Quyet, the family of Ms. Nguyen Thi Mai (born in 1991), from Nam Dinh, is looking for an apartment in Cau Giay District (Hanoi). Ms. Mai said that after looking at many apartments, with a budget of less than 3 billion VND, the 2-bedroom apartment segment seems to have disappeared. If there are any, they are only dilapidated, leaky houses that cannot be lived in for a long time.
Not only the case of Mr. Quyet and Ms. Mai's family, according to research data from the Vietnam Association of Realtors (VARS), housing prices are continuously setting new levels, far exceeding the income growth rate of the majority of people. The apartment price index in the second quarter of 2024 in Hanoi and Ho Chi Minh City increased by 58% and 27% respectively compared to the second quarter of 2019. Affordable commercial apartment projects have completely disappeared in urban areas.
Following the fever of apartment prices, the selling price of houses attached to land, including villas and townhouses, has also increased, including some projects in districts far from the center of Hanoi when the inner city supply is increasingly scarce. If in the past, the unit price of hundreds of millions per square meter for villas was considered high, now there are villas for sale at prices up to 1 billion VND/m2 which is still considered normal.
Many factors cause house prices to increase "skyrocketingly"
Ms. Nguyen Thi Hong Van - Deputy Director of Valuation and Financial Consulting Department, Savills Hanoi - commented that the biggest impact of the 2024 Land Law on the real estate market is that the Government has removed regulations on land price frameworks, empowering localities to determine land prices according to the market annually instead of every 5 years as in the old law.
In addition, the law also stipulates that land can only be reclaimed after resettlement housing has been handed over. This regulation will help to facilitate the compensation and site clearance process, helping the implementation of projects to take place quickly.
However, the fact that compensation prices are close to market prices and compensation support is provided strictly will increase investment costs in the project, leading to an increase in real estate prices. It is forecasted that in the short term, housing prices, especially apartment prices, will continue to increase due to limited new supply in the market.
The Ministry of Construction's report on housing and real estate market in the second quarter of 2024 shows that the real estate inventory in projects is about 17,105 units and plots (including apartments, individual houses, and land plots). Notably, despite the large amount of inventory, the selling price of real estate products on the market continues to increase, especially in the two major cities of Hanoi and Ho Chi Minh City.
Mr. Nguyen The Diep - Vice President of Hanoi Real Estate Club - said that when the revised laws officially take effect, the calculation of land use fees and compensation for site clearance will be higher. Therefore, businesses with projects will easily rely on that to increase product prices.
According to Ms. Pham Thi Mien - Deputy Director of the Institute of Vietnam Real Estate Market Research and Assessment (VARS), speculation and price inflation through auctions is also one of the reasons for the high real estate prices, making the dream of owning a home increasingly distant for people, especially young people.
