Accepting to buy suburban apartments, the poor still cannot afford the price

After many years of searching for a house in Hanoi's inner city districts, Mr. Tran Anh Tu (from Ha Giang) had to give up his dream of having a place to live in the inner city because the price of houses in Hanoi has increased too much and is now beyond the reach of him and his wife.

Mr. Tu said: " My wife and I have saved about 300 million VND, both families cannot support, so if we have to borrow, we can only borrow from the bank. However, the price of houses in the inner city is now around 4 billion VND for a 50 - 60m2 apartment. Therefore, even if I can borrow up to 80% from the bank, I still cannot meet the loan conditions because my income is low, and my financial resources are not enough for 20%... ".

However, still not wanting to pay 7 million VND per month for rent, Mr. Tu and his wife decided to switch to buying apartments in the suburbs, accepting to work far away with the hope that the price of suburban apartments would be more affordable. But what surprised Mr. Tu was that although he agreed to buy a house in Gia Lam district, the price of apartments here was not cheap.

" A broker took me to see an apartment on the 20th floor of an apartment building, 60 square meters in area, priced at 3 billion VND. So, the 300 million VND my wife and I have is only 1/10 of the value of the house, and we are not eligible for a bank loan, " Mr. Tu said sadly.

The prices of many apartments in the suburbs of Hanoi are also sky-high. (Illustration: Internet)

Mr. Tu continued to look for apartments in other areas such as Hoai Duc, Thanh Tri, Dong Anh... but the situation was not very optimistic, because the apartment prices here were all around 50 million VND/m2, equivalent to about 3 billion VND for a 60m2 apartment.

" I thought that suburban apartments with small areas would cost around 1.5 - 2 billion VND. But this type of apartment is no longer on the market. The cheapest apartment that the broker showed me was also priced at 2.2 billion VND. With this house price, my wife and I are thinking of borrowing from friends before we can borrow more from the bank ," Mr. Tu shared.

In the same situation as Mr. Tu, Ms. Tran Nguyet Minh (from Hai Duong ) also shared her story of struggling to find a house. Ms. Minh said that after many years of working, she and her husband had saved up 500 million VND and planned to buy a small house in the inner city of Hanoi for the convenience of the whole family going to work and school. However, Ms. Minh was disappointed when the price of apartments in the inner city were all around 4 - 5 billion VND.

" Every month I have to pay about 8 million VND in rent, so I really want to have a house, even a small one, to reduce this monthly expense, so my husband and I decided to borrow from the bank to buy a house, " Ms. Minh shared. However, with such high house prices, the couple could not meet the bank's loan conditions.

According to the broker's introduction, in the suburbs of Hanoi, there are currently many projects built in modern urban areas with good infrastructure connections, so moving to the inner city does not take too much time and most importantly, the house price will probably be much cheaper than the inner city. Finding it reasonable, Ms. Minh decided to look for an apartment in the suburbs.

However, when the broker took her to see the house, Ms. Minh could not help but feel "dizzy" because the prices of suburban apartments were all around 70 - 90 million VND/m2.

" The broker took me to an apartment of about 60 square meters. I was very satisfied because it was located in a modern urban area with a swimming pool and a playground. But when I heard the price of 89 million VND/m2, I was really shocked. After many searches, I realized that even if I accept to travel 20 km to work, the house price is still sky-high, " Ms. Minh complained.

Suburban apartments are not cheap

According to real estate experts, the price of apartments in the suburbs of Hanoi has also increased quite sharply recently because the price of apartments in the inner city has been pushed up too high.

For example, in Hoai Duc district, the selling price of apartments in the An Lac Green Symphony and The Wisteria projects ranges from nearly VND60 million/m2 to VND73 million/m2. A 108m2 apartment with 3 bedrooms here is being sold for VND7.5 billion, equivalent to more than VND69 million/m2.

Many people have to give up their dream of buying a house in the suburbs of Hanoi.

In Gia Lam district, there are apartments priced from 80 million VND/m2 to over 90 million VND/m2. A 62m2 apartment is being sold for 5.7 billion VND, equivalent to nearly 92 million VND/m2.

In Dong Anh district, apartment prices also fluctuate between 40 and 60 million VND/m2. A 58 m2 apartment is for sale at 3.6 billion VND, equivalent to nearly 60 million VND/m2.

Mr. Nguyen Quoc Khanh, Vice President of the Vietnam Association of Realtors (VARS), commented that not only have inner-city apartment prices increased sharply, but suburban apartment prices have also reached a new level, reaching about 60 - 70 million VND/m2.

" This is something I have not expected in the past 15 years. This price is not much lower than in the inner city, making it increasingly difficult for people, especially those with average and low incomes, to own a house, " Mr. Khanh commented.

Sharing the same opinion, Mr. Vu Cuong Quyet, CEO of Dat Xanh North, also said that currently, suburban apartment prices are not cheap, with the average price fluctuating around 50 - 60 million VND/m2.

Explaining why suburban apartment prices are still increasing despite being far from the city center and having many worse conditions than those in the inner city, Mr. Quyet said that the reason is due to increased construction costs, high compensation for site clearance, and high taxes, so it is difficult for investors to sell cheaply.

Besides, the current market has not gone through a difficult time so there are not many investors participating, while the supply of inner-city apartments is too small, leading to the price of suburban apartments also increasing.

In addition, with increasingly scarce land funds today, developing social housing is not easy, which causes suburban apartment prices to rise.

From another perspective, Mr. Nguyen Quoc Anh, Deputy Director of PropertyGuru Vietnam, analyzed that the continuous increase in land prices has pushed up apartment prices. If land prices increase by 20-30% each year, apartment prices will increase by about 9-10%.

In addition, the concept of the central area of Hanoi has also changed a lot. Previously, Hoan Kiem was the core district of the city, the neighboring districts such as Dong Da, Hai Ba Trung, Ba Dinh, Cau Giay... were considered the central districts of Hanoi. But recently, areas with developed infrastructure, convenient connections and full services and utilities are also considered the central area. This is also the reason why suburban apartments have "upgraded" and increased in price.

Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, also said that apartment buildings in areas considered far from the center such as Dong Anh, Nam Tu Liem, Ha Dong, Nam Tu Liem, Gia Lam... have continuously increased in price in recent years due to increasingly improved infrastructure.

Specifically, belt roads, highways, and Red River overpasses have been invested in and built, increasing the connectivity between these areas and the city center, thereby pushing up real estate prices.

Another reason is that the policy mechanisms are not synchronized, leading to the situation of supply not meeting demand. Projects are not approved or are very difficult to be approved, while the demand for housing is increasing, especially in big cities. This makes housing prices in general increase, low-income people find it difficult to buy houses in the inner city and tend to gradually move to the suburbs. High demand makes supply quickly scarce, so the price of suburban apartments increases according to market rules.

Chau Anh

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