Supply not enough demand
According to PropertyGuru Vietnam Company's real estate market report for the first quarter of 2024, in the first quarter, apartment prices continued to trend upward. After 6 years, the average price increase rate of apartments in Hanoi is up to 70%.
According to information on Tien Phong, prices of apartments located in central or suburban areas of Hanoi city all recorded a sudden increase. According to experts, there are no unusual factors because the most fundamental reason is that supply does not meet demand.
Mr. Nguyen Van Dinh - Vice Chairman of Vietnam Real Estate Association - said that prices are still high and the decline rate is weak. The demand for apartments is huge but the supply is scarce. Typically, in recent years in Hanoi, no new apartment projects have been approved. High demand, weak supply, prices do not decrease, even tend to increase.
The demand for apartment housing is large but the supply is limited (photo: Nhu Y).
Also according to Mr. Dinh, there are only a few suburbs and areas with potential, preparing to become districts, with investment in technical infrastructure that receive more attention from investors. However, in essence, due to the large number of people interested, but not much stock, this is leading to scarcity. Since then, the price of apartments in Hanoi or other provinces in general has not decreased.
Mr. Vu Cuong Quyet - General Director of Dat Xanh Mien Bac - said that the need for apartment buildings in Hanoi is very large and urgent. In particular, over the past 2 years, supply in the two major cities above has been lacking even though existing demand is still high.
According to Mr. Quyet, in the first quarter of this year, apartment prices in Hanoi continued to increase by 6-8% after a sharp increase in 2023. This is a strange phenomenon when apartment prices in Hanoi are pushed to high levels in the market. Real estate is going down. In the last two quarters alone, the apartment market in Hanoi has increased by 2-10%.
According to CBRE's report, primary apartment selling prices in Hanoi in the first 3 months of the year averaged about 56 million VND/m2, up 5% quarter-on-quarter and up 19% year-on-year.
Will apartment prices cool down in 2025?
VTC News information, according to experts, house prices cannot keep increasing forever, if the scenario more than 10 years ago repeats, when affordable housing projects increase, the supply-demand balance is balanced, then house prices will lower.
Mr. Nguyen Anh Que, Chairman of G6 Group, acknowledged that the reason for the increase in apartment prices, in addition to increased input costs, also comes from businesses having too many legal procedures, leading to prolonged time. Supply cannot keep up with demand.
For example, in 2010, the Indochina Plaza apartment project on Xuan Thuy Street (Cau Giay, Hanoi), had an average selling price of 50 - 60 million VND/m2. But by 2013, when supply increased, the price of many apartments in this area was only 30-35 million VND/m2. After more than 10 years, apartment prices here are now about 100 million VND/m2.
With actual developments, the representative of G6 Group commented that if the old scenario repeats, house prices may decrease from 2026. The reason is because housing projects in general and social housing projects will began completing procedures, pushing supply to increase about a year later, helping house prices cool down.
According to the Vietnam Association of Real Estate Brokers (VARS), after a long period of decline, apartment supply in Hanoi and Ho Chi Minh City is expected to increase again, thanks to the recovery of the market and efforts force to remove legal obstacles for projects of State management agencies.
Especially the supply of social housing and worker housing will be launched on the market in the near future. However, the supply from these products takes time to complete legal procedures before being released to the market and mainly comes from remote areas.
Many experts predict that from mid-2025 house prices will decrease.
By mid-2025, when legal documents related to the real estate sector take effect in the direction of removing difficulties for investors and buyers of social housing and housing for workers, house prices may cool down.
"The supply of social housing will increase, the price level of apartments will drop to a level more suitable for people with real housing needs," VARS said.
Talking to the press, Ms. Duong Thuy Dung - Senior Director of CBRE Vietnam - affirmed that apartment prices will not increase forever, apartments will increase until they reach the "tolerance threshold" and affordability. of home buyers.
According to Ms. Dung, the clearest evidence for this fact is that apartment prices in Ho Chi Minh City, after continuously increasing from 2017-2019 and reaching a peak, by 2022, apartment prices in this city have leveled off and across.
In the Hanoi apartment market, Ms. Dung believes that prices will continue to increase until the average price level of 100-200 million VND/m2 will be forced to stop.
Recently, at the Conference to deploy the 2024 tasks of Hanoi's construction industry, Deputy Minister of Construction Nguyen Van Sinh proposed that Hanoi actively participate in completing the guiding decrees for the two projects Law on Housing and Housing. Real Estate Business Law; Pay attention to the task of managing housing development, especially removing difficulties and obstacles for real estate and housing projects in the area.
“Regarding investment in social housing development, the task assigned by the Prime Minister in 2024 is very high (130.000 apartments), the Hanoi Department of Construction must review licensed social housing projects that have started construction. build to register more feasible and positive targets for 2024; Promote 28 projects to have investment policies approved to select investors and start construction soon... ", Deputy Minister Nguyen Van Sinh emphasized.
In the above context, according to experts, the Government and localities need to quickly find solutions to untie and "untie" businesses to promote the affordable housing segment to increase supply to the market.
INDEPENDENCE FLEXIBLE (th)
