4 billion VND for an old social housing apartment
Mr. Dinh Xuan Hoa (Thanh Liem district, Ha Nam) has been working in Hanoi for 10 years, saving about 2 billion VND. He and his wife are looking to buy a house to prepare for the birth of their first child. After 2 months of not being able to find a commercial apartment to buy because of the high price, he switched to buying old social housing projects and was very surprised by the price.
“I researched two projects, @home 987 Tam Trinh, Hoang Mai and the Rice City - Tay Nam Linh Dam social housing project (Hoang Liet ward, Hoang Mai district). Although people have been living in these apartments since 2016 and 2017, the prices of these apartments are very high, with some apartments costing more than 4 billion VND. I was really surprised because the quality of the houses is not as good as new, but the prices here are still over 50 million VND/m2. My wife and I heard from brokers that the prices are still increasing every day because Tam Trinh road is being rebuilt, and traffic will be more convenient in the future,” said Mr. Hoa.
Mr. Nguyen Trung Hieu, a broker at a real estate website, said that due to the current scarcity of housing supply, social housing projects that previously cost just over 10 million VND/m2 have also increased in price several times.
“We sell many projects so I know very well, not only social housing in the inner city but also apartments in the suburbs have increased in price very dramatically. For example, the social housing project in Dang Xa urban area (Gia Lam) was previously opened for sale at about 13 million VND/m2. Now, after about 10 years, the selling price has increased to 40 million VND/m2, an increase of more than 3 times. In Ha Dong area, social housing apartments in The Vesta Hai Phat project (Ha Dong district, Hanoi), from 800 - 900 million VND/2-bedroom apartment, have now increased to 2.1 - 2.4 billion VND", said this real estate broker.
Why is old social housing expensive?
A recent market report by Savills said that Hanoi had no new supply of apartments priced below VND45 million/m2 in the second quarter. Since 2020, the affordable apartment segment (Class C) has decreased by 45% per year. In the future, this segment is expected to contribute only 25% of new supply.
This is the reason why the social housing segment has also become a "piece of cake" for many investors and brokers to exploit. Social housing prices in many areas in Hanoi have therefore increased "dizzily".
Mr. Nguyen The Diep - Vice President of Hanoi Real Estate Club - said that when the revised Land Law, Housing Law and Real Estate Business Law were implemented, difficulties were removed, such as 20% of housing being used for commercial purposes, expanding income levels, household registration, etc.
"We need to classify and the first priority group must be wage earners, officers and soldiers in the armed forces who have difficulty with housing, followed by the urban poor. These are the groups that need to buy social housing the most," said Mr. Diep.
To cool down social housing prices, Mr. Nguyen The Diep proposed that there should be policies to promote businesses to participate in developing social housing projects as well as overcome shortcomings in the procedure processing, ensure the rights of participating businesses, speed up project progress, thereby increasing the supply of social housing to the market.
