Taking advantage of rising apartment prices, homeowners compete to raise prices

Three months ago, Ms. Tran Thi Hoai Thu (Hanoi) wanted to buy an apartment of about 100 square meters in an urban area in Nam Tu Liem district. This is a project that is nearly 20 years old, the apartment is not new, Ms. Thu chose it because she thought the price would be suitable for her family's limited financial capacity.

But Ms. Thu did not expect that the price of old apartments in this urban area would continuously increase. Initially, the broker quoted the price of a 3-bedroom apartment at around 3.7 billion VND, but exactly 1 week later, the broker said that the owner required 3.9 billion VND, excluding taxes and fees, to sell. Not only that, a short time later, Ms. Thu was informed that the price of the apartment had increased to 4 billion VND.

"Apartment prices are increasing as fast as during the land fever, but for real buyers like me, we cannot keep up with these prices. That's why I have to accept renting, wait for the market to stabilize and then buy later," said Ms. Thu.

Similarly, Mr. Dao Van Manh (Ha Dong) said that in mid-December 2023, he asked for the price of a 58m2 apartment in Cau Giay district and was quoted 3 billion VND. Nearly a month later, when he was planning to pay to buy, he contacted the broker again and the price had increased to 3.2 billion VND.

"When I asked why the price of the same apartment changed so quickly in such a short period of time, the broker said that the owner raised it himself to match the market trend, to avoid being disadvantaged compared to others. The economic difficulties, declining income, and continuously increasing house prices made it difficult for me to buy. I tried to manage and borrow money everywhere to buy, but the price had already been raised. Now I can't borrow any more and don't want to borrow, because I feel like there is a phenomenon of price inflation." Mr. Manh said.

Faced with the situation of high apartment prices in a short time, many brokers believe that one of the reasons is that there is a phenomenon of homeowners increasing prices following the trend, when one person sells at a high price, the other does not want to sell at a low price, this has created a new level. Homeowners believe that the market is currently not abundant in new supply, especially projects in central locations, so apartment prices must be high to be reasonable, even for degraded apartments.

However, according to brokers, the fact that homeowners are competing to raise prices too high makes most customers hesitant, reduces interest and gives up the intention to buy.

Mr. Nguyen Van Khoi, a long-time real estate broker in Hanoi, shared that closing a deal is very difficult because many homeowners do not really want to sell when prices are fluctuating.

"Many homeowners are investors who own many apartments. When they see that the market has a scarce supply, they are willing to raise prices with the thought that if they can sell, they will make a big profit, and if they can't sell, they will rent it out because apartment prices are currently increasing, so they will benefit no matter what," said Mr. Khoi.

He cited many cases where customers agreed to buy but the homeowner was still willing to "turn around" and demand a price increase because "there are few houses for sale on the market now".

"The inflated prices of apartments have made it very difficult for real estate brokers to sell. For apartments with reasonable prices, we even have to pay a deposit right away so that the owner does not change. Then we can find a buyer to sell to. This deposit is also very risky for brokers because if we cannot sell, we will lose a large amount of money," Mr. Khoi shared.

According to Mr. Giang Anh Tuan, Director of Tuan Anh Real Estate, recently, apartment prices have been increasing continuously in both the primary and secondary markets due to a severe shortage of supply. However, in addition to this reason, it is also partly due to the fact that homeowners have taken advantage of the opportunity to inflate prices.

"I myself have worked with many sources of goods and after only 1-2 months, they are willing to increase the price up to 3 times. Although this quantity is not much, it is enough to make it difficult for many home buyers to close the deal," said Mr. Tuan.

According to Mr. Tuan, while house prices are at a high level, home buyers should carefully calculate and consider their financial capabilities. If they do not have enough money, buyers can also rent a house, instead of chasing after the landlord, because it is very possible that the current price is just "virtual", exceeding the real value, causing buyers to suffer losses.