Apartment prices continue to increase, is it the golden time for buyers?

Apartment prices in Hanoi continue to increase

Recently, the real estate market has recorded a loss, especially in the land segment. Secondary land prices in suburban districts have decreased by 15-35% compared to the beginning of 2022, while project land has also decreased by 8% to 15%. Meanwhile, in the opposite direction, Hanoi apartments are still recording an upward trend.

One Mount Real Estate’s Hanoi apartment market overview report shows that new supply and consumption in the first quarter of this year are estimated to reach 760 units and 1,800 units, respectively, mainly from the mid-range and high-end segments in the eastern and western regions of the capital. Not only did the newly launched apartments have a high absorption rate, but the remaining inventory from the previous quarter was also consumed during this period.

Existing mid- and high-end apartment projects in Hanoi in the first quarter are mainly located near Ring Road 3 and Ring Road 3.5, with about 42% coming from western districts and about 45% coming from eastern districts. Of which, 60% of the total market supply comes from projects in metropolitan areas.

Căn hộ chung cư liên tục tăng giá, đã tới thời điểm vàng cho người mua? - 1 — Many apartments are built in the eastern area of Hanoi (Photo: Ha Phong).

Transaction volume in the first quarter of this year was concentrated in the East and West of Hanoi.

Notably, the apartment market in the eastern part of Hanoi and Van Giang ( Hung Yen ) in the first quarter recorded the number of apartments opened for sale and consumed in the area reaching approximately 40 and 330 units, respectively. Apartment prices in this area always recorded high primary prices, with the highest price growth rate in the past 5 years.

According to Mr. Tran Minh Tien - Director of One Mount Real Estate, from 2017 to the fourth quarter of 2022, the price of primary apartments in Hanoi increased by an average of 13.8% annually. In which, the expanded eastern area of Hanoi had the highest price increase.

Specifically, Van Giang (Hung Yen) is the area with the highest price increase of 29%/year, followed by the East of Hanoi (including Long Bien district and Gia Lam district) increasing by 16%/year. The West and North of Hanoi only increased by an average of 7%/year.

Is it the "golden time"?

Talking to Dan Tri , Mr. Tran Quang Trung - Business Development Director of One Housing said that capital continues to flow into real estate, however, investors are increasingly cautious and focus on real estate types that can generate cash flow. Demand in the coming time will increase again, but not evenly across segments.

"People who previously only had the habit of investing and speculating are restructuring their investment portfolios, looking for products that can bring immediate cash flow. Many investors are now shifting from townhouses and land to investing in apartments to gain better profits from renting," said Mr. Trung.

Căn hộ chung cư liên tục tăng giá, đã tới thời điểm vàng cho người mua? - 2 — An apartment building in Hai Ba Trung district, Hanoi (Photo: Ha Phong).

According to Mr. Trung, currently, investors are implementing very good support programs. That is the reason why many customers no longer focus on residential products or products that do not have interest support, because they have to pay "cash".

"Investors only focus on products that are receiving interest rate support, low interest rates from reputable investors and banks with strong potential. Normally, if anyone plans to buy a house, their equity is at least within 20 years," Mr. Trung emphasized.

In addition, this expert believes that positive signals from the macro economy related to credit capital and legality through Resolution 33 and Decree 08 of the newly issued Government , show that the period of "local confusion" has passed. The market is entering the screening and classification stage for both investors and developers.

"Earlier this year, many investors had to leave the game and restructure. But on the contrary, there are still many investors who can survive thanks to their good management and implementation capacity," Mr. Trung emphasized.

Many people still expect the bottom of real estate, but according to Mr. Trung, the apartment market will not have a bottom when primary prices continue to increase, supply is congested and input costs increase. This is also a segment serving real housing needs that can generate cash flow.

"The best price range is when buyers choose legal products, generate immediate cash flow and choose the best financial leverage. At this stage, products that serve the real needs of society and meet the majority of the middle class will have great potential," he emphasized.

Sharing the same opinion about the apartment market, the Chairman of the Vietnam Real Estate Brokers Association said that there will not be many fluctuations in the next few months. Housing supply continues to be scarce, including the high-end segment. Selling prices will be difficult to increase further but also difficult to decrease due to high input costs.

According to Mr. Dinh, in the context of increasingly scarce land funds in the city center, 70% of the new apartment supply in Hanoi last year came from large urban projects in the East and West. Real demand is very strong but the transaction volume is not high because prices are too high compared to income, while speculative demand is limited due to rising interest rates, along with tightening credit.

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