Apartment prices continue to rise
According to a survey by reporters in Ho Chi Minh City, there are currently less than 10 apartment projects being launched by investors, but most of them are in the high-end and super luxury segments. For example, the King Crown Infinity project on Vo Van Ngan Street, Thu Duc City. The lowest price of this project is currently 110 million VND/m2, the highest is 160 million VND/m2.
At the Eaton Park project invested by Gamuda Land Group (Mai Chi Tho Street, Thu Duc City), the current selling price offered by the investor is 4,800 USD/m2. Or like the Vinhomes Grand Park project on Nguyen Xien Street, Thu Duc City, the selling price is 60 million VND/m2. Real estate company Son Kim Land also announced the sale of The Metropole project in Thu Thiem, Thu Duc City, the current selling price is about 300 million to more than 400 million VND/m2.
Another project that is being opened for sale by the investor is The Global City on Do Xuan Hop Street, Thu Duc City, with the selling price offered by the investor being around 140 million VND/m2. Even projects far from the center of Ho Chi Minh City such as the Essensia Sky project in Nha Be District that has just been launched are priced at 70 million VND/m2.
Talking with many brokers, it is known that in reality, real estate prices, especially apartments in Ho Chi Minh City, have increased too high, projects introduced in the past have offered prices at 100 - 120 million VND/m².
Meanwhile, some projects with prices of about 45 - 60 million VND/m2 that are being traded are projects quite far from the center, with inconvenient transportation. Housing prices are high, but in reality, transactions are not as active as investors expected, and many businesses have not even sold at this stage. Not only new projects, the price increase wave is also quietly happening in the secondary market.
According to a recent survey by DKRA Group, currently, apartment prices in Ho Chi Minh City have mostly exceeded 60 million VND/m2.
The problem is not simple
Analysts say that real estate prices in major cities are already beyond the financial capacity of the majority of people, and have recently increased many times faster than the rate of income growth. Meanwhile, the economy is still struggling to overcome difficulties, causing the gap between income and housing prices to widen.
In addition, experts are also concerned that when the new land price list is applied closer to the market price, the story of reducing house prices will be even more difficult. It is predicted that the application of the new land price list closer to the market price in the coming time will increase the selling price of houses and real estate by an average of 15-20% compared to the previous period.
From the perspective of businesses, the story of reducing house prices is really difficult. The general director of a real estate company in Ho Chi Minh City confided that more than anyone else, investors want to sell at low prices to boost product consumption, but in fact, this period cannot be done. Even in the most difficult time of the market, the housing price level is still increasing because input costs are all going up, not to mention that finding a suitable land fund to develop a project at the present time is extremely difficult.
Neighboring areas of Ho Chi Minh City no longer have clean land and have to go further and further away, along with that, the procedures to complete a project are still prolonged with costs constantly increasing.
“A few years ago, land use fees were less than 20 billion VND for each small-scale project, but now they have increased more than 4 times to more than 80 billion VND, not to mention a series of other accompanying costs,” said the director.
According to Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, the current high housing prices are not only due to the increase in land prices but also due to the shortage of supply. Accordingly, land costs are only one factor in the cost structure of real estate, while the important factor determining prices is the shortage of housing supply.
If there is a solution to increase supply and stimulate transactions in the market, housing prices will tend to cool down. Therefore, increasing the construction of housing projects, especially social housing, is one of the fundamental solutions to stabilize the market.
