Despite raising the classification level to under VND45 million per square meter, the proportion of affordable apartments is still very low, only about 5-7% of new supply, according to the Ministry of Construction.
In the 2024 real estate market performance report, the Ministry of Construction said that the apartment segment in Hanoi and Ho Chi Minh City has increased significantly compared to 2023. Therefore, the criteria for classifying segments has been raised by 28-44% by this ministry.
Specifically, apartments priced under 45 million VND per square meter belong to the affordable segment, previously under 25 million VND per square meter. Meanwhile, luxury apartments have increased from over 50 million VND per square meter to around 70-100 million VND per square meter.
Despite the upgrade in classification, the structure of new apartment supply still shows a clear trend of imbalance. The Ministry said that the affordable segment accounts for only 5-7% of the total new supply, while the high-end segment accounts for 60-65%. Mid-range apartments from 45-70 million VND account for about 30-35% of the market share. In particular, the market last year recorded a few super luxury projects with prices exceeding 100 million VND per square meter.
The reason comes from the strong growth of the apartment market last year, fluctuating 40-50% in Hanoi and about 20-30% in Ho Chi Minh City. In Da Nang, some projects also increased prices by 20% compared to 2023. New projects escalated, leading to an increase in the transfer price of old apartments, locally 60-70% in some areas.
2024 is the year that apartments will set a new price level in both the primary and secondary markets. In Hanoi, many low-cost apartment complexes, which were opened for sale at 10-15 million VND per square meter a decade ago, have increased by 40-50% compared to 2023. Even in areas far from the center of Hanoi, the supply of apartments is constantly being supplemented but the selling price is up to 70-90 million VND per square meter, competing with new projects in the inner city. There are even some projects offering for sale at over a hundred million VND per square meter in Dong Anh district.
In Ho Chi Minh City, some apartment projects also increased their secondary prices by about 10-20% compared to the beginning of the year, concentrated in the inner city. According to the Institute of Construction Economics, about 37% of the secondary supply in Ho Chi Minh City is priced above VND5 billion. The proportion of the VND1.5-3 billion segment reached more than 30%, more abundant than in Hanoi. However, old apartments priced below VND1.5 billion also accounted for less than 3%.
Housing prices are climbing, despite supply improving quarterly. The Ministry of Construction said that last year, the country had 59 completed commercial housing projects with more than 16,700 units, up nearly 2% compared to 2023. Of which, the North accounted for 60% of new supply, the South about 29%, and the rest was in the Central region.
In Hanoi alone, real estate consultancy CBRE said the number of new apartments for sale in 2024 tripled compared to the previous year, exceeding 30,900 units. This is also the highest annual supply since 2020.
Not only apartments, the Ministry of Construction said that the price of individual houses in the project also tends to increase sharply. In Hanoi, this segment is advertised at a common price of 100-200 million VND per square meter, even some new projects in the suburbs are launched at a price of over 300 million VND per square meter. Compared to 2023, this segment has increased in price by about 30-40%. In Ho Chi Minh City, the increase is slower, about 5-10% with a common advertised price of 90-250 million VND per square meter.
In the long term, if the story of rising real estate prices is not intervened soon, it will lead to many consequences for the market and society. Mr. Nguyen Van Dinh, Chairman of the Vietnam Association of Realtors (VARS), said that the high-end segment in the market is mainly "for investors with a lot of money". Meanwhile, the affordable segment, which should be the most popular, is "extinct", with no new projects. The sharp increase in housing prices makes it increasingly difficult for those with real housing needs to reach their dream of settling down while the wealthy group continuously buys, creating a speculative trend.
According to a study by Batdongsan channel, more than 86% of real estate buyers today aim to invest in "surfing" to make a profit. The time from when they buy to when they sell is a maximum of one year. The percentage of investors who hold real estate for more than one year is only 14%.
Decree 96, which stipulates a number of articles of the 2023 Law on Real Estate Business, has added a mechanism to regulate the real estate market. Accordingly, measures to regulate the real estate market are implemented by the management agency when the transaction price index increases or decreases by more than 20% in three months or when the market has other fluctuations that affect socio-economic stability.
Market fluctuations are assessed by the Ministry of Construction based on price indexes, transaction volume and socio-economic indicators in other real estate-related fields.
TH (according to VnExpress)