After 2 years of being affected by the Covid-19 Pandemic, the market of real estate has exploded in the projects of various segments such as land plots, villas, and townhouses in Hanoi, which have been launched with skyrocketing prices. the segments of land plots and villas are suddenly clogged in liquidity, which leads to the galloping selling prices of apartments.

Having bleary-eyed looking for apartments under 2 billion VND

During the 2 years of the pandemic, most manufacturing businesses were seriously affected, but real estate emerged as an exception. Especially, the prices of land plots, villas, and townhouses segments ranging from the center to the periphery of Hanoi have increased dramatically, even doubling or tripling in some particular places. Many real estate investors got profited billions of VND for only one week, one month from buying then selling activities. Many people were attracted to this segment with the expectation that they could double their profits.

However, the market in 2022 is facing many shorts as credit is rigorously controlled resulting in investors' obstacle in borrowings from banks and then causing a serious decrease in liquidity. As the result, many investors fled, exited goods, and even resold with losses to find new segments. Meanwhile, the apartment segment in Hanoi, due to the limitation in supply, has inflated its price since the beginning of this year.

Ms. Nguyen Hoa (Bac Tu Liem, Hanoi) has been looking for an apartment around Thanh Xuan and Cau Giay districts for 3 months continuously, due to the unaffordable apartment price at this period, she cannot find for her a suitable apartment now. She said: “My kid is about to enter grade 1, so I want to move to a nearby district with better education for her. With my budget of 2 billion, I can’t find the right one in contrast with one year ago, with this same budget I have various options for buying a 60-square-meter apartment in most districts of Hanoi. Additionally, she said that currently, the commercial housing projects opening for

sale with a price under 50 million VND per square meter in Hoang Mai and Cau Giay districts are scarce. Especially, the project The Park Home Cau Giay invested by Handico 52 Company is sold out with 40 million VND/m2 and Hanoi Melody Residences of Hung Thinh Group with nearly 50 million VND/m2. meanwhile, commercial apartments have recently been handed over apartments for 5-10 years, and all of a sudden the prices are increased doubly even in some areas triply. “I am also looking for social housing that has been lived in for 5 years, eligible for transfer, but its recent transfer price is upper than 2.5 billion VND for a 2-bedroom-and-2-bathroom apartment at the Rice City Linh Dam (Hoang Mai, Hanoi) while its original price costs only 1 billion. Reluctantly, I went to the old apartments and couldn’t help but be shocked when the prices of many areas around Cau Giay and Ba Dinh also doubled even though the infrastructure is not impressive at all”, said Ms. Hoa.

Mr. Minh Trung (Trung Van, Nam Tu Liem, Hanoi) said that last month, he resold his 60m2 apartment for 2.1 billion VND (two times more than its original 4-year-ago price) to buy a 3-bedroom apartment, but he realized that he must spend 3.5-4.5 billion VND one apartment regardless the old or new projects. “After reselling my apartment, I cannot afford a new one now. it is obvious that I resold it at a good price, and so do others. I got shocked when looking at the apartment price now. currently, the new projects launched in Dong Da district cost more than 80 million/m2, and the new project on Le Van Luong St. (Thanh Xuan) costs nearly 60 million/m2. On the other hand, the old projects surrounding these two streets such as Centerpoint, The GoldenPalm, etc. have transaction prices up to 50 million VND/m2, which is unbelievable if we look at their price originally cost 25-32 million/m2 a few years ago”, said Mr. Trung.

Lacking supply

The reason behind this galloping increase in price assessed by economic experts and authority institutes such as the Ministry of Construction and the Department of Construction is the lack of supply these recent years. Generally, the prices of

an apartment have been increasing from 30-70% depending on its location. Specifically, the price of Dai Kim Building (Hoang Mai, Hanoi) has increased by 60% over 5 years, Hanhome Giang Bien project (Long Bien, Hanoi) from 25 million VND/m2 to 30 million VND/m2 for 2 years, Hei Tower project (Thanh Xuan, Hanoi) from 28 million to 40 million VND/m2 for 3 years.

SOLUTIONS

Accelerating Social Housing

sharing about the topic of the pressure of the shorts of new project leading to rising apartment prices, Mr. Tran Sy Thanh, Chairman of Hanoi People’s Committee answered the reporter of Tien Phong on August 8 that, Hanoi will accelerate the new project soon”. he also added that launching new projects is facing a lot of wrongdoing.

To solve the problem of shortage of housing supply, Mr. Bui Xuan Dung, Director of the Department of Housing and Real Estate Market Management (Ministry of Construction) said that expanding the number of social and worker's housing is one of the urgent to-dos work of socio-economic development policy. the target is to build up social housing and housing for workers with possible prices for low and middle-income households, and workers in industrial zones.

By 2025, all projects that have already been implemented (156 projects with 156,700 apartments) and projects that are undergoing investment procedures (245 projects with 300,000 apartments) shall be completed. By 2030, accomplish investing the construction of 1 million apartments for social housing and workers of industrial parks.

“Currently, there are two major policies on capital for supporting the development of social housing. the first one is a 15,000-billion package for low-income people to loan to buy a house. the second one is the loan interest rate is cut by 2% for businesses”, Mr. Dung informed.

according to the summarized data given by the Department of Construction, the Ministry of Construction concluded that the number of succeeded transactions of

apartments and houses is 69,079 mostly found in Hai Phong, Long An, Da Nang, HCM City, and Can Tho, respectively.

One real estate business leader in Hanoi informed us that the demand for apartments in Hanoi is always at a high rate, which reflects the rule of supply and demand. Therefore, some sales brokers push up the prices according to the short of supply.

Irregular Price

Hanoi Trade is open for sale at the rate of 80 million VND/m2, said the Deputy Director of the Department of Construction of Hanoi, “Government does not interfere too much with the market price, but the selling price for commercial apartments in Hanoi this time is very absurd”. according to him, for investors, buying an apartment with an up to 80 million VND/m2 price should not be increased furthermore. Moreover, leasing is not as effective as saving.