High profit still not selling
Mr. Tran Kien Trung, a real estate investor in Hanoi , shared that at the end of 2021, he bought a nearly 70m2 apartment in an apartment building in Nam Tu Liem district for 2.6 billion VND. Up to now, apartments similar to his are being traded on the market for 3.2-3.3 billion VND.
According to Mr. Kien, considering the investment goal, at this time, he can completely close the profit. However, based on the market situation, the current primary apartment price is still high, while the new supply is still scarce.
"I am renting the above apartment for 8.5 million VND/month, the rental profit in one year is 100 million VND. With the monthly income and the increasing value of the apartment, I have decided not to sell this apartment," Mr. Trung shared.
An apartment building on Nguyen Xien Street (Hoang Mai, Hanoi) (Illustration: Ha Phong).
Similarly, Ms. Nguyen Thu Trang in Hoang Mai district said that in early 2022, she bought an apartment in Thanh Tri district. At first, she intended to buy it to "surf" for profit, but then kept it to rent out.
"Apartment prices have been increasing rapidly over the past 2-3 years, with my apartment increasing from 1.9 billion VND to 2.6 billion VND. Even though I saw a profit, I still decided to keep it for rent to have monthly cash flow," Ms. Trang shared.
Like Mr. Trung and Ms. Trang, many other apartment investors in Hanoi also have the same decision not to sell their apartments at the present time to make a profit. Because according to these investors, the price of apartments in Hanoi has increased sharply in all projects. If they sell, with the money they earn, if they continue to buy apartments for investment, they worry that after selling, the price will still increase, and the money they earn will hardly be able to buy an equivalent apartment.
In addition, current investment directions are not favorable because the general economy is facing difficulties.
Sky-high apartment prices
According to the Ministry of Construction , in the fourth quarter of 2023, according to data compiled from reports from localities and survey information from market research organizations, apartment prices will continue to increase in the two major cities of Hanoi and Ho Chi Minh City, especially in central areas.
There are almost no projects in the affordable apartment segment (price under 25 million VND/m2) on the market, but mainly in the mid-range apartment segment (price 25-50 million VND/m2) that are eligible to mobilize capital and trade.
Specifically, in Hanoi, in the fourth quarter of 2023, according to the summary report, some projects had an average price increase in areas such as: Thanh Xuan district increased by about 3.5%; Ha Dong district increased by about 3.7%; Hoang Mai district increased by about 3.8%; Nam Tu Liem district increased by about 4.1%...
An apartment project in Ha Dong district, Hanoi is in the process of completion (Illustration photo: Ha Phong).
In particular, the selling price of affordable apartments is 25-35 million VND/m2; the selling price of mid-range apartments is about 35-50 million VND/m2; the selling price of high-end apartments is over 50 million VND/m2, commonly at 60-70 million VND/m2.
Sharing about this issue, Mr. Nguyen Van Dinh - Chairman of the Vietnam Association of Realtors (VARS) - said that the price of apartments in Hanoi in the primary market is continuously increasing because there are very few investors with projects in this period. Investors with supply in this period are mostly large investors, not facing financial difficulties, so the offering price is high to maximize profits. The average price of apartments in Hanoi in the primary market is 51.7 million VND/m2.
According to Mr. Dinh, the primary price level is difficult to decrease due to input costs (housing index and construction material prices increase by about 6% each year). Along with that, inflation and interest rates are increasing. In addition, the number of newly approved commercial housing projects is increasingly scarce, and land funds in central areas are also not much left.
In addition, according to this expert, although the price of apartments in Hanoi in the primary market has not decreased, home buyers still benefit from unprecedented preferential policies in the policy race of investors.
"Buyers can pay in installments, enjoy preferential interest rates, and principal grace periods 2-3 times longer than in previous years. This is boosting the liquidity of the apartment segment in the primary market," Mr. Dinh shared.
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