Apartments in Prime Locations Experience Slight Decrease in Prices
The real estate market in Hanoi and Ho Chi Minh City has witnessed a moderate decrease in the prices of high-end and luxury apartments, according to a study conducted by the Vietnam Association of Realtors (VARS).
Rising Prices in Hanoi, Stabilized Market in Ho Chi Minh City
In Hanoi, apartment prices have consistently increased in both primary and secondary markets. Meanwhile, in Ho Chi Minh City, prices have started to rise again, accompanied by a gradual decrease in prices for luxury projects in the secondary market.
The surge in housing demand, combined with dwindling land reserves and a continuous decrease in housing supply, has contributed to the consistent upward trajectory of apartment prices over the past few years. The increasing urban land value, due to infrastructure upgrades and public services, serves as a driving force for the establishment of new apartment price benchmarks.
Notably, the demand for housing has not only increased due to real needs but has also been fueled by a significant number of investment buyers. This trend is evident as rental prices for existing and new apartments in residential areas have continuously risen following the relaxation of COVID-19 restrictions, especially in the context of a recovering market.
Moreover, the latest report from Batdongsan.com.vn shows a 66% increase in nationwide interest in buying apartments in January 2024 compared to the same period in 2023. The number of property listings has also increased by 46%. Specifically, searches for apartments in Hanoi have increased by 71% compared to the same period, while searches in Ho Chi Minh City have increased by 59%. This trend is observed in most provinces and cities across the country.
Credit Constraints Impact the Market
Despite low borrowing rates, credit for consumer loans and real estate purchases has continued to decline in the first few months of 2024 compared to 2023. The uncertainty regarding inflation and interest rates has made borrowing money for housing and monthly debt repayments of over 10 million VND a burden for many families, as they lack confidence in future job prospects and income stability.
Nevertheless, some commercial banks with diverse real estate ecosystems have reported a slight increase in housing credit as people start to show interest in investing again.
Short-Term Outlook and Future Prospects
VARS expects that apartment prices in the central areas of major cities will continue to rise, especially in the affordable and mid-range segments. However, luxury projects may experience a slight decrease in their buying and selling prices.
Looking ahead, VARS anticipates that by mid-2025, with the enactment of new laws related to land and real estate, the affordable and social housing market will witness an increase in supply, benefiting both developers and potential homebuyers. This increase in supply will result in more appropriate apartment prices that align with the actual needs of the population.
As the real estate market undergoes fluctuations and new trends emerge, it is crucial to stay informed and make informed decisions when it comes to buying or selling apartments.