Apartment prices have risen sharply.

Two years ago, Nguyen Ngoc Anh, 31, from Thanh Hoa province, and his family saved 700 million VND. At that time, he thought about saving up to 1 billion VND, then buying a 2 billion VND apartment in Hanoi on installments. But now, this dream seems distant, as the price of the house his family intended to buy has increased to nearly 3 billion VND.

Can't buy, renting is also a hassle.

"We can't afford to buy a house, while the rent for the apartment my family is renting in My Dinh has just been announced by the landlord to increase from 7 million VND to 8 million VND. With this situation, my family is considering moving back to our hometown," Mr. Ngoc Anh confided.

Over the past year, despite mortgage interest rates falling to half their peak and the overall real estate market facing difficulties, apartment prices in major cities have continued to rise. Many people now find it almost impossible to buy an apartment in Hanoi's inner districts for prices ranging from 25-30 million VND/m2.

According to data from Batdongsan.com.vn in January 2024, affordable apartments in Hanoi are priced at around 30 million VND/m2, a 2% increase compared to December 2023. Mid-range apartments also saw a 2% increase, reaching 30-50 million VND/m2.

Increased demand is the reason for the sharp rise in apartment prices.

According to Batdongsan.com.vn, in segments that meet real needs such as buying, selling, and renting secondary apartments or inner-city retail spaces, many real estate brokers have resumed work immediately after the Tet holiday. The scarcity of supply coupled with increased demand has led to more active transactions in these segments after the Tet holiday.

Similarly in Ho Chi Minh City, the price of affordable apartments increased by 4% in January 2024; the price of mid-range apartments increased by 1% compared to December 2023.

Speaking with a reporter from Nguoi Lao Dong newspaper, Mr. Nguyen Quoc Hiep, Chairman of Global Real Estate Joint Stock Company (GP Invest), commented that apartment prices have increased unusually recently. The reason is that customer demand, especially from young people, is very high, but the supply on the market is limited.

Mr. Hiep cited the example of an apartment project on De La Thanh Street, Hanoi, which his company built and put into use in 2012. At that time, the developer advertised apartments at a price of 26-28 million VND/m2. More than 10 years later, the price of these apartments has been advertised at 50 million VND/m2, double the initial price. Similarly, the Nice Tower project on Pham Van Dong Street, Hanoi, was advertised by the same company at an initial price of 42-46 million VND/m2 in 2021, and after two years, the price had increased to 75-85 million VND/m2.

Supply remains scarce.

According to this developer, the scarcity of project supply is the main reason for the high increase in apartment prices. For GP Invest, the last apartment project to be developed and handed over in Hanoi was in 2022. "For the past two years, we haven't had any new apartment projects handed over," Mr. Hiep said.

With apartment prices rising sharply, landlords have also adjusted rental prices accordingly. The chairman of GP Invest estimates that apartment rental prices in Hanoi have increased by 30%-40% recently.

Ms. Hang Nguyen, a real estate investor specializing in apartments in Hanoi, confirmed that apartment prices are currently nearly 80% higher than in 2019. The main reason is increased demand coupled with a scarcity of supply.

Statistics from the Ministry of Construction show that with the current population growth rate and housing demand, the country needs approximately 70 million square meters of urban housing each year. Given the current supply situation, Vietnam will face a shortage of about 300,000 housing units annually. This shortage is driving up housing prices, especially in the affordable and mid-range apartment segments.

According to real estate experts, if the supply does not improve soon, pressure on housing prices in major cities will continue to increase in 2024, and possibly even further into the future. Those with limited incomes, young families, and families moving from rural areas to the city will face even greater difficulties in finding an apartment.

The Ministry of Natural Resources and Environment is currently drafting a proposal for a "Pilot project to implement commercial housing projects through agreements on land use rights or existing land use rights for other land," expected to be submitted to the Government in early March 2024. The Chairman of GP Invest hopes that this proposal will be approved by the Government, piloting the conversion of other land into residential land after the agreement, thereby resolving obstacles to the development of new apartment projects and cooling down this market.

In the current context, to suit their affordability, many people have shifted their investment towards buying smaller apartments in Ho Chi Minh City and further from the city center in Hanoi.

According to Resolution No. 01/NQ-CP, the Prime Minister requested the acceleration of the development of social housing and housing for workers in 2024, with the goal of completing 130,000 apartments.

Mr. Nguyen Van Dinh, Vice Chairman of the Vietnam Real Estate Association, suggested that the Government should accelerate the implementation of projects, especially social housing projects, to realize the goal of providing 1 million apartments by 2030. He emphasized the need for stronger promotion to ensure affordable housing options for the people, so that when these products enter the market, people will have more reasonable choices and avoid putting pressure on supply.

Source: https://nld.com.vn/gia-nha-chung-cu-tang-manh-196240304204806502.htm