Apartment fever has stopped but prices have not decreased

In the past month, Mr. Le Cuong, a broker with more than 5 years of experience in the East of Hanoi, closed two old apartment transactions, down nearly 70% compared to March. He said that the transfer basket has become less scarce, but the number of interested people has decreased sharply. In the most recent week, he only took 6 people to see the house, "no transaction has been closed", while at the peak in March, there were days when he received nearly ten visitors.

This broker sees that the psychology of apartment buyers has cooled down. "It's rare to see people put money down on the first viewing," he said. Some old customers contacted him, asking "if there are any discounted apartments," but then continued to wait and see when they learned that prices were still high.

The director of an apartment transfer floor in Nam Tu Liem district said that the number of transactions of the unit decreased by about 60% after one month. He noted that the number of people interested in this segment decreased significantly compared to after Tet, most of them were just checking the price, not paying.

However, the price of old apartments has not shown any signs of decreasing, despite the cooling of interest and transactions. From mid-April to early May, apartment prices in the secondary market shifted from climbing to slightly increasing or stagnating.

In the urban area of ​​Tay Mo, Nam Tu Liem, the transfer basket of two-bedroom apartments of 55 m2 is priced at about 2.9-3.2 billion VND in the subdivision that has been handed over for two years. The difference depends on the interior conditions. The unit price of 53-58 million VND per m2 in this subdivision has increased by about 15% compared to the end of last year and has been fixed since March until now.

Similarly, at the 36-storey apartment project on Chau Van Liem Street, the selling price of some apartments in early 2023 was around 45-50 million VND per square meter. By the first quarter, the price had increased to around 60-65 million VND per square meter and has remained stable until now.

The recent phenomenon of apartment price reduction, according to broker Le Cuong, appeared in some apartment buildings that increased abnormally at the beginning of the year even though they did not have certificates and were mostly far from the center. When the number of interested people suddenly decreased, homeowners who needed money urgently would "give a bonus" of 100-300 million VND or give away furniture to make the goods sell faster.

Apartment prices even increased slightly in projects with convenient locations in central districts such as Cau Giay, Dong Da, and Hai Ba Trung.

A recent report from the Batdongsan classifieds channel shows that the level of interest in apartments last month has decreased by 23% compared to the peak in March, after more than a quarter of continuous increase. However, the selling price shows no signs of decreasing but maintains a slight increase. Many affordable apartment buildings under 30 million VND per square meter increased by 12% compared to the previous month. Meanwhile, mid-range and high-end apartments increased less, about 3-5%.

Similarly, data from the real estate listing site Nha Tot also shows that Hanoi apartment prices still increased slightly by 4% month-on-month, reaching an average of VND52 million per square meter in April. Compared to the same period last year, this level has increased by nearly 26%. This site recorded that apartment prices increased from December to early March and tended to increase more slowly.

Mr. Nguyen Van Dinh, Chairman of the Vietnam Association of Real Estate Brokers (VARS), said that the level of interest in apartments has cooled down because people have less FOMO (fear of missing out). However, after establishing a new level, the selling price is very difficult to decrease, especially when the Hanoi market has not resolved the imbalance between supply and demand. Currently, this segment has increased for 21 consecutive quarters, reaching nearly 60 million VND per square meter.

The Chairman of VARS sees social housing as a hope for the housing market to become more competitive, contributing to reducing apartment prices. In reality, the implementation of social housing projects is very slow. Since last year, the city has only had one social housing project with nearly 280 apartments for sale.

Sharing the same view, Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan channel, said that "waiting for apartments to have big discounts is very difficult" because the supply cannot improve quickly. Meanwhile, the demand for housing is increasing, especially in large cities. In the future, when the Real Estate Business Law 2023 comes into effect, the number of investors meeting the requirements for project implementation may decrease, making the supply even more limited.

Mr. Quoc Anh emphasized that apartment buyers at this time need to clearly define their purpose. If buying to live, buyers can consider putting down money as soon as their finances allow and they find a suitable house. In the case of short-term investment, buyers should not put down money yet because the price and level of interest in apartments at this stage are not stable. When needing quick liquidity, investors will encounter difficulties.

In the long term, experts say that apartments are an investment product that brings a fairly stable cash flow. Taking into account the price increase rate and rental yield in the period 2015-2023, apartments bring in a profit of about 12% per year, "higher than investment channels such as stocks, gold, savings or foreign currency," said Mr. Quoc Anh.