Proposing businesses and real estate project investors to reduce housing prices

Apartment price is higher than land price

Apartment prices in Hanoi and Ho Chi Minh City have been continuously establishing new price levels in recent years.

Mr. Cao Cuong in Trang An Complex Apartment (Cau Giay District, Hanoi) said that he has just changed his residence from an apartment to a house. According to him, apartment prices are high, so it is a good time to change, while houses and land are reasonably priced. His old apartment has an area of ​​over 70 m2, 2 bedrooms, and was just sold by him for 3.5 billion VND, equivalent to about 50 million VND/m2, 1.5 times higher than the time of purchase in 2019. With this amount of money, Mr. Cuong added about 500 million VND to buy a house in an alley with an area of ​​35 m2, built 4 floors, 1 attic, 3 bedrooms, convenient for travel...

According to statistics from the Ministry of Construction, from the third quarter of 2023, the average selling price of apartments in the primary market increased by nearly 7% quarter-on-quarter, increased by 14% year-on-year, reaching about VND50.8 million/m2. The price adjustment followed the upward trend due to the overwhelming proportion of new supply in the high-end segment (over 90%). Along with that, some investors adjusted prices and opened additional sales funds on higher floors. In the secondary market, the average selling price of apartments continued to increase from the previous quarter, reaching about VND32 million/m2, up 2.7% quarter-on-quarter and 0.8% year-on-year.

In the southern provinces, the selling prices of apartments in new projects introduced by investors in Ho Chi Minh City, Binh Duong... are quite high. Many projects have announced expected and official prices higher than the residential land prices in the surrounding areas. For example, The Privia project in An Lac ward, Binh Tan district (Ho Chi Minh City) has just been announced by investor Khang Dien to be eligible for sale, with an average price of about 48 million VND/m2; apartment projects in Binh Duong such as the Bons Binh Thang project (Binh Thang ward, Di An city) have just been introduced to the market with a selling price of about 34 - 37 million VND/m2...

Although many apartment project investors have policies such as interest rate support and 10-20% discount, in reality, they still do not attract buyers because the selling price is quite high. People with real housing needs do not have enough money to buy, and investors are still cautious and inquisitive.

Real estate experts believe that the reason for the high apartment prices is that investors have had to bear many expenses in the past time and the apartments offered on the market at this stage are mostly in the mid-range and high-end apartment group, so the selling price may be higher than the price of residential land. In addition, since the beginning of the year, the market has not recorded any new projects being implemented, the apartments launched at this stage are all inventory of previously built projects.

Discounts to suit people's income

According to VNREA, although the real estate market is facing many difficulties, many businesses are still selling apartments at high prices, not suitable for people's income. In the current context, the Prime Minister has repeatedly directed in conferences to remove difficulties for the real estate market.

Through research, from 2022 to present, the recommendations and proposals of VNREA and the real estate business community have been accepted, considered and resolved by ministries, branches and localities, but real estate businesses have not actively restructured the segment and reduced product prices in accordance with reality. Some high-end and mid-range apartment projects have reduced prices, but not significantly, mainly implementing discount policies, promotions, post-sale codes...

To implement the Prime Minister's directive on reducing housing prices to match people's incomes, VNREA recommends that businesses with housing products on the market reduce housing prices and not keep prices high. At the same time, increase discounts, promotional policies, after-sales services, and stimulate consumption in the real estate market to create cash flow and liquidity.

VNREA also recommends that real estate corporations and businesses shift their investment to the affordable housing segment, suitable for people's income, in order to join hands to remove difficulties for the real estate market to recover quickly, develop safely, healthily and sustainably.

A recent report by the Ministry of Construction on the real estate market shows that high-end and mid-range apartment projects still dominate the market; affordable apartments have not recorded any new supply. Specifically, in November 2023, the high-end apartment segment priced above VND40 million/m2 still accounted for the highest proportion, nearly 70%. The mid-range apartment segment priced from VND20 - 40 million/m2 accounted for more than 30% and the market continued to have no supply for the affordable apartment segment.