“Dở khóc dở cười” when selling an apartment during the “price frenzy”, doubling profits but struggling to buy a new home
Tiếc nuối vì giá chung cư tiếp tục tăng
The scarcity of housing supply in recent years has caused apartment prices to skyrocket, not only in the primary segment but also in the resale market. In mid-January 2024, Mr. Nguyen Tuan Khang (Hoai Duc, Hanoi) completed the transfer of a 2-bedroom apartment with an area of 65m2 for 2.1 billion VND. He said that he and his wife bought this apartment 8 years ago for just over 1 billion VND. So, from the time of purchase to the time of sale, he made nearly double the profit.
“At that time, real estate agents kept contacting me with high purchase offers, so I was tempted. I thought that was the peak price, and if I didn’t sell quickly, the price might drop and the opportunity to upgrade to a better home would be lost. Many of my neighbors also sold their apartments to get more money for a nicer home,” he said.
After selling, Mr. Khang rented another apartment in the same building while looking for a new home. However, due to the Lunar New Year holiday, the search for a temporary home was put on hold. After the holiday, his family started looking for a new home, but to their surprise, apartment prices had skyrocketed.
“At the beginning of March, my neighbors sold their apartments for 300 million VND more. So, if I want to buy a similar apartment to my old one, I have to pay several hundred million VND more, not to mention the price for a nicer one. Thinking about it, I regret not selling later. My wife has been sighing because we lost several hundred million VND by selling too early,” Mr. Khang said.
A similar situation also happened to Mr. Tran Van Dan (Ha Dong, Hanoi). His apartment, with an area of 74m2 and 2 bedrooms, was transferred at the beginning of February for 2.9 billion VND. However, the price of this apartment has now increased to 3.3 billion VND, an increase of 400 million VND in just over a month.
“Selling for 2.9 billion VND meant a 40% profit compared to the purchase price. I didn’t expect apartment prices to continue to rise. Although I have found a new home, it’s hard to believe that I have to spend an additional 400 million VND in such a short period of time,” Mr. Dan said.
Apartment prices will continue to rise
A recent report by Savills recorded that the prices of primary market apartments and land in the market have continued to increase in the third quarter, marking 19 consecutive quarters of growth, despite the gloomy market.
Specifically, the primary market prices for apartments reached 54 million VND/m2, an increase of 2% quarterly and 13% compared to the same period in 2022. It can be seen that the prices for primary market apartments have consistently increased for 19 quarters, exceeding 77% compared to the first quarter of 2019. The average secondary market price is 36 million VND/m2, an increase of 2% quarterly and 8% yearly.
According to the Ministry of Construction, this price increase is due to the overwhelming dominance of newly supplied properties in the high-end segment (over 90%). In addition, some investors have increased prices and released additional units on higher floors.
Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association (VARS), said that although the real estate market has faced difficulties recently, property prices have remained high. In particular, the apartment segment in major cities continues to grow, establishing new price levels that far exceed the income of the majority of the population. This contrasts with the decline in prices and liquidity of land, villas, shophouses, townhouses, and terraced houses.
Research data from VARS shows that property prices have increased dozens of times in the past decade. In 2021 alone, average house prices grew by two digits.
VSRS experts predict that in 2024, the prices of primary market apartments will continue to increase by an average of 3-8%. The reason for this is that the short-term housing supply is still not being solved. Specifically, the number of new commercial housing projects is very limited and has been decreasing, especially in the affordable and mid-range segments.