Apartment prices are still 'racing', some places increased by 40% in 3 months

(CLO) A report from the Ministry of Construction confirmed that recently, real estate prices in some areas have increased locally by about 35% to 40% depending on the location compared to the previous quarter.

Apartment prices in some places increased by 35 - 40% compared to the previous quarter.

In the report announcing information on housing and real estate market in the third quarter of 2024, the Ministry of Construction said that in the quarter, in some major provinces and cities such as Hanoi and Ho Chi Minh City, apartment prices continued to increase in both new and old projects. This has caused the price level of new projects to increase by about (4% to 6%) quarterly and (22% to 25%) annually.

The reason for the recent increase in real estate prices is largely due to the impact of a number of factors such as increased fluctuations in land-related costs, especially in some localities; affordable housing products are not in sufficient supply to meet market demand.

A report from the Ministry of Construction confirmed that recently, real estate prices in some areas have increased locally by about 35% to 40% depending on the location compared to the previous quarter. (Photo: ST)

The above reasons have caused apartment prices to increase, especially in some areas where prices have increased locally by about 35% to 40% depending on the location compared to the previous quarter.

Not only the apartment segment, the selling price of villas and townhouses in the third quarter also saw strong growth. In Hanoi, most of the newly launched projects in this quarter are in favorable locations, located in areas with strong investment in infrastructure, so the primary asking price is relatively high.

The average secondary selling price of landed properties in Hanoi this quarter reached around VND160 million/m2 (up 3% quarter-on-quarter and nearly 7% year-on-year). Some projects in areas such as Dong Anh and Long Bien had higher secondary price increases (around 5%) quarter-on-quarter, thanks to infrastructure development and products of new projects that are gradually being completed.

In Ho Chi Minh City, the average primary price of villas and townhouses in the project was almost stable and there were some areas with sharp price decreases in the high-end segment, large area with a decrease of about 14% quarter-on-quarter and 28% year-on-year, accordingly, products priced under 10 billion VND had quite good transactions in the quarter.

The Ministry of Construction said that because new projects in suburban areas have prices lower than the city's average, this shows that demand for well-priced products is still strong, despite being located in suburban areas and far from the city center.

However, there is a paradox when the secondary prices of some projects in Ho Chi Minh City fluctuate and decrease by about 3% - 4%.

Price increase due to "virtual price creation" and "price inflation" by speculators

According to the Ministry of Construction, the recent increase in real estate prices is localized, occurring in some areas, some types, and some real estate segments, leading to an impact on increasing general prices.

The Ministry of Construction said that recent fluctuations in land-related costs as well as the impact of applying new calculation methods and land price tables have caused real estate prices to increase.

In particular, in some localities and areas, there is a phenomenon of land use rights auctions with winning bids many times higher than the starting price. The management and implementation of land use rights auctions in some areas and localities are not good; there is a phenomenon of many investors forming associations and groups to participate in the auction; paying land prices many times higher than the starting price, and then possibly "abandoning the deposit" after winning the land auction with the aim of establishing a virtual price level in the area to make a profit.

The auction of land use rights with the winning bid being many times higher than the starting price will have the impact of increasing the land price level, real estate price, housing price of the neighboring area and the locality; at the same time, it will increase the cost of implementing housing projects, causing difficulties for businesses, reducing supply to the market, negatively affecting the real estate market.

In addition, prices increase due to the phenomenon of "creating virtual prices" and "inflating prices" by speculators and individuals working as real estate brokers, taking advantage of people's lack of knowledge and investing according to the crowd psychology to make profits.

These are individuals who operate as freelance brokers, do not have real estate brokerage certificates, are weak in expertise, have limited legal knowledge, lack professionalism, and are weak in business ethics, leading to opportunistic business practices, colluding to raise prices, inflating prices compared to actual values, manipulating the market, causing damage to customers, and reducing the transparency of the real estate market.

In addition, due to the lack of real estate and housing supply to meet the needs of the majority of people, low-income and middle-income earners in urban areas, especially Hanoi and Ho Chi Minh City.

Source: https://www.congluan.vn/gia-chung-cu-van-dang-dua-gia-co-noi-trong-3-thang-tang-40-post319152.html