Are Apartment Transactions in Hanoi as Busy as Rumored?
In recent times, many investors have considered the apartment segment to be an attractive investment channel rather than a consumer good, as previously believed. However, does the buying and selling of apartments truly match the hype surrounding this segment?
For over two years, Mr. D.T. Viet, a real estate broker at Phu Tai Land Trading Floor, has mainly focused on the apartment segment. His decision was influenced by the stagnation in land transactions, while apartments remained a potential area of interest.
Despite this, Mr. Viet recently shared that apartment transactions have not been increasing due to the continuous rise in prices. He stated, “The number of customers looking to buy is quite high, but we only manage to sell a few units. The developers keep reverting to old prices and increasing them, which affects the transaction volume,” as reported by Bao Nguoi Lao Dong.
In terms of pricing, real estate brokers have observed that apartment prices in Hanoi have increased by approximately 6% compared to the end of last year. One of the reasons cited by Mr. Viet is the scarcity of apartment supply. Previously, the trading floor would have 5 projects available at the same time, whereas now it has decreased to only 1 or 2 projects. Apartments with smaller sizes are being quickly sold due to their affordable prices.
Mr. Viet mentioned, “Before, you could buy a beautiful apartment for 4 billion VND, but now it’s difficult to find a satisfactory unit. Apartments in the suburbs can cost up to 50 million VND per square meter.”
Similarly, Mr. Thang, an apartment broker, has complained that he has only managed to secure 2 apartment units for clients in the past month, which is an extremely low number. While many potential customers show interest, their financial capacity is not sufficient due to the sharp increase in apartment prices. Therefore, they have adopted a wait-and-see approach to see if prices will gradually cool down in the near future.
On the other hand, a representative from a notary office in Bac Tu Liem District stated that they only notarize around 1-2 apartment transactions per day, out of a total of 5 real estate transactions. The market is not as bustling as rumored for this segment.
According to the Vietnam Real Estate Brokers Association, apartment prices in Hanoi have continuously increased in both the primary and secondary markets. Meanwhile, apartment prices in Ho Chi Minh City have also started to rise again, along with a slow decline in premium projects in the secondary market.
Many real estate experts believe that the rapid increase in apartment prices in Hanoi is due to the prolonged shortage of supply in the market. The number of new projects released in the past few years has been extremely limited, while the demand for apartments for residential purposes remains high.
Despite the strong demand from buyers, the housing supply is not proportionally developing. The supply of apartments in 2023 is projected to decrease by around 31% in Hanoi compared to the previous year. In Ho Chi Minh City, the supply of new apartments is expected to reach nearly 7,500 units, a decrease of over 50% compared to the same period in 2022. The decline in housing supply is attributed to the scarcity of newly approved real estate projects, as well as the challenges related to legal and financial issues faced by ongoing projects.
Business Today