Will apartment prices decrease in 2023?
Reports from Vietnamese real estate research companies show that despite the market downturn, housing and apartment prices in major Vietnamese cities, such as Hanoi and Ho Chi Minh City, continue to increase, averaging 5% - 10%, depending on the area and segment.
In particular, the average apartment price in Ho Chi Minh City has reached 60 million VND/m2, while in Hanoi it is also 45 - 50 million VND/m2.
Experts say it is very difficult for apartments in Hanoi and Ho Chi Minh City to decrease in price in 2023. (Photo: QT)
There are many reasons for the increase in housing prices, such as the scarcity of land in the city center leading to increased land prices and compensation costs; the lengthy process of licensing and approving projects increases investment costs; the escalating price of labor and materials; fluctuating loan interest rates... But the main reason is still the limited supply of projects.
Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, also predicted that segments such as mid-range and affordable apartments and real estate with good commercial exploitation value will still have transactions, so the possibility of lowering prices is very difficult, especially in the context of scarce supply as it is now.
The land fund in the inner city areas of the two big cities of Hanoi and Ho Chi Minh City is increasingly scarce. Along with that, changes in planning and tighter policies will make the supply of commercial housing projects and apartments in this area difficult to be abundant.
Meanwhile, the demand for apartment ownership is still very high, which will make it difficult for apartment prices to decrease. In addition, apartment prices in suburban areas will increase faster than in central areas because suburban land prices increase rapidly.
Therefore, experts emphasize that it is necessary to quickly remove legal barriers so that new projects can be implemented, especially social housing and low-cost commercial housing projects. When supply is abundant, the selling price of the apartment segment will be stable.
Mr. Dinh commented that in 2023, current real estate prices in areas with projects at prices that are not suitable for the market will certainly be adjusted accordingly, while projects with prices that are suitable will find it difficult to decrease because input pressure is also very high.
"In addition, large input costs such as interest rates, raw materials, and land prices also increase, leading to difficulty in reducing real estate prices," Mr. Dinh commented.
However, projects that previously followed the trend, pushed up prices, and increased prices unreasonably will certainly have to be adjusted. As for projects that have been adjusted to not make much profit but mainly create jobs to maintain production and business activities, and set appropriate price levels, the market will still accept them.
“The real estate market is still increasing, increasing with inflation, increasing with investment value, because the Government is currently investing in infrastructure and when the infrastructure develops, land value will increase accordingly,” Mr. Dinh commented.
Should you invest in real estate in 2023?
The Chairman of the Vietnam Brokers Association admitted that in 2022, Vietnam's real estate market will decline, although not to the point of collapse. However, recently, the Government has taken very drastic actions to support the market's recovery.
The Prime Minister directed that it is very necessary to stabilize the market and create all conditions to help the market develop stably and sustainably. A working group has been established to study and recommend solutions for the Government to make decisions.
However, in general, real estate is still an attractive investment channel. (Photo: MV)
“With a series of government measures, although all are being urgently organized, it will take time for the solutions to take effect. Maybe in the first quarter to the second quarter of next year with specific solutions, the real estate market will operate stably,” said Mr. Dinh.
Therefore, Mr. Nguyen Van Dinh believes that real estate is always an attractive investment channel, because our country is developing, especially the infrastructure system is developing, the urbanization speed is accelerating. Infrastructure investment creates economic zones, industrial zones, tourist areas that bring economic efficiency, requiring the development of job growth, income, housing...
“Real estate in the current period has good potential and strong attraction, so investing in real estate at this time and in the next few years is still the most attractive investment channel,” said Mr. Dinh.
Source
Comment (0)