Will house prices skyrocket in the near future?

Recently, the National Assembly passed the Housing Law, with many new regulations. In particular, the Housing Law does not stipulate the term of apartment ownership.

Commenting on this issue, Mr. Giang Hoang Anh, director of a real estate trading floor in Hanoi, said: Removing the apartment ownership period is necessary to avoid unnecessary psychological concerns for home buyers.

There is no regulation on the term of ownership of the apartment, whether it has increased in value, but within the maximum period of time, picture 1. — According to experts, the increase in apartment prices depends on many factors, including the removal of the apartment ownership period. (Photo: MPO)

“An apartment or a house is a very large asset in a person’s life, so if there is a regulation on apartment term, many people will feel like they are renting rather than owning the house. Not to mention, many people still have the mentality that real estate is an inheritance, to be left to their children and grandchildren. Therefore, I think removing this regulation is reasonable,” said Mr. Hoang Anh.

Some opinions say that removing the apartment ownership period could cause apartment prices to continue to skyrocket, Mr. Hoang Anh said this opinion is partly correct.

Analyzing this further, Mr. Hoang Anh said: Before the new Housing Law was passed, the market had two apartment product lines, respectively long-term ownership apartments, mostly 50 years, and permanent ownership apartments.

“Comparing these two product lines is quite awkward, because it depends on the project and amenities, but if comparing these two product lines in the same segment, the permanent ownership apartment line has a price 20% - 30% higher than the limited-term apartment line,” Mr. Hoang Anh shared.

Thus, in the case of removing the regulation on apartment ownership period, it will be a factor causing house prices to increase. However, the increase in apartment prices also depends on many other factors, such as land prices, raw material prices, labor prices, etc.

“The factor that has caused apartment prices to increase sharply in recent times is low supply, supply not meeting demand. If the supply-demand problem is solved, I think apartment prices will be restrained,” Mr. Hoang Anh emphasized.

Meanwhile, Mr. Vu Cuong Quyet, General Director of Dat Xanh Mien Bac, said that long-term ownership of apartments will be more popular. Therefore, removing regulations on apartment ownership time will have a positive impact on homebuyers' psychology, helping this market become more vibrant.

Regarding the impact on price, Mr. Quyet said that many people think that apartments with limited ownership are cheaper than apartments with long-term ownership, but if this happens, the difference is not much.

“If it is cheaper, it may only be 5-7%, at most 10%, while other costs are fixed. Therefore, how much cheaper the price of a limited-term apartment depends on how much the State collects for land,” Mr. Quyet said.

However, according to Mr. Quyet, apartment prices will still increase in the coming time due to the large gap between supply and demand.

"Just looking at the supply and demand in the current market, we will see that the supply is very low, but the demand is high. Demand is always stable but supply is gradually drying up," Mr. Quyet cited.

Commenting on the price of apartments in the coming time, Dr. Nguyen Van Dinh - Chairman of the Vietnam Association of Real Estate Brokers (VARS), said that the real estate supply in general and the apartment supply in particular in the coming time will hardly have a breakthrough. Apartments from the low-end to mid-range and high-end segments will continue to be in short supply, so prices will be difficult to decrease, and may even increase.

Regarding this issue, Mr. Nguyen Van Dinh forecasted that the selling price of primary apartments in 2024 will continue to increase by an average of 3-8%, in particular, the price of high-end apartments will increase the most.

Source