According to a report by a real estate research unit, 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.
The mid-range apartment segment is increasingly scarce, gradually being "dominated" by the high-end and luxury segment when more than 80% of the supply of apartments for sale in Hanoi and Ho Chi Minh City in 2024 is priced from 50 million VND/m2 or more. Many newly launched apartment projects have prices of tens of thousands of USD/m2.
The high primary selling price of anchor apartments has led to a "skyrocketing" price of old apartments. Many apartments that have been used for decades are being traded at prices double or triple the price at the time of handover.
According to experts from the Vietnam Association of Realtors (VARS), the selling price of houses attached to land, including villas and townhouses, has also "followed" the fever of apartment prices, increasing, 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/m2 for a villa was considered high, now there are villas for sale with prices up to 1 billion VND/m2 which is still considered normal.
Land prices have also been continuously increasing. Many provinces and cities have recorded the phenomenon of clean legal land "heating up" locally due to re-investment activities or some groups of investors creating fake supply and demand to push up prices. In some provinces and cities such as Hai Duong, prices have exceeded the "fever peak" of 2022.
VARS experts believe that in the short term, primary housing prices will hardly decrease, especially in the apartment segment - the type that meets the housing needs mainly in urban areas. Because in the context of the demand for real estate, especially the investment demand, is constantly increasing, investors will prioritize the development of the high-end segment to maximize profits when land funds are increasingly scarce, construction costs are increasing along with infrastructure and utilities being invested in with increasing quality.
This situation poses an urgent need to improve the effectiveness of state management of the real estate market. According to VARS, in parallel with promoting the supply of social housing in urban areas, promoting the development of connecting infrastructure, shifting housing demand from the central core area to the surrounding area - an area with many options at higher prices, with more social housing projects planned for implementation. The state needs to have a regulatory mechanism to reduce speculative factors, helping the real estate market to be balanced in the long term.
