Apartment prices increased to 60 million/m2, will they increase further?

The price of new apartments in Hanoi is currently reaching an average of 59 million VND/m2 - increasing for 5 consecutive years and is forecast to be very difficult to decrease in the near future - Photo: Van Duan

This is one of the contents discussed by experts at the seminar "Cash-Home real estate: Apartment segment leads the Hanoi market in 2024" organized by Construction Newspaper on the afternoon of April 24, in Hanoi.

According to reports from market research units, apartments in Hanoi have continuously set new price levels in recent years. As of the first quarter of 2024, the average price of new apartments has reached 59 million VND/m2, increasing for 5 consecutive years (21 consecutive quarters).

Secondary market prices of Hanoi apartments in the first quarter recorded the highest annual price increase ever, up 17% over the same period last year and reaching an average of more than VND36 million/m2.

Economists and real estate experts at the seminar

CBRE's real estate market focus for the first quarter of 2024 recorded that in the first 3 months of 2024, new supply in Hanoi focused mainly on high-end apartment projects in the West, reaching a total of more than 2,300 apartments and 30 low-rise houses recorded for new sales in the quarter.

Compared to the same period in 2023, the supply of new apartments for sale in Hanoi in the first quarter of 2024 increased by 11%. However, this figure has not yet recovered to the level of 3,000 - 4,000 newly opened apartments in the first quarter of the previous years 2021 and 2022.

CBRE expects that in 2024, Hanoi will record more than 12,000 new apartments for sale, an increase of nearly 20% compared to 2023. New supply continues to focus on the high-end segment, causing primary prices in Hanoi in 2024 to remain high and possibly increase by 10% year-on-year.

Meanwhile, the secondary apartment price level, after many fluctuations over the past two years, is expected to gradually stabilize due to more abundant new supply in the coming quarters.

Shark Hung, vice chairman of the board of directors of CEN Group, said that current apartment prices are quite balanced compared to supply and demand. Reducing apartment prices in the near future is very difficult.

At the seminar, "Shark Hung" - Mr. Pham Thanh Hung, Vice Chairman of the Board of Directors of CEN Group, said that at this time everyone can feel the sudden increase in apartment prices, especially in Hanoi.

Mr. Hung said that this is a necessary adjustment when for a long time, the real estate market has encountered many difficulties in terms of supply, legality, market, etc., causing investors to face a crisis of excess cash flow.

"According to a report in the first quarter of 2024, the total amount of money in commercial banks is 18 million billion VND. However, people who are in dire need of money cannot borrow more because they have no collateral. People who can borrow but do not need it because they do not know what to borrow for. This is a consequence," said Mr. Hung.

Along with the credit surplus, the interest rate of banks lending to real estate has also dropped to an unprecedented low, down to only 5-6%. This is an unprecedented interest rate in the history of nearly 30 years. That is the reason why investing in real estate business has created positive cash flow and attracted investors.

Responding to the question of whether apartment prices will increase or decrease, "Shark Hung" said that there are currently not many other products to replace real estate investors. Apartment prices are increasing mainly due to increased land prices. "I think that current apartment prices are quite balanced compared to supply and demand. If there is a "slip" and the price increases further, there will be adjustments, but I think there will be no decrease in apartment prices" - Mr. Hung commented.

Source: https://nld.com.vn/chung-cu-o-ha-noi-tang-gia-len-gan-60-trieu-m2-lieu-con-tang-nua-196240424173349429.htm