How to Turn Your Dream of Home Ownership into Reality?
The real estate market has been experiencing a slowdown in various segments recently. However, the market for condominiums continues to heat up in many provinces and cities across the country, especially in major urban areas such as Hanoi and Ho Chi Minh City. Some areas with planned urban development and infrastructure investment have seen a significant increase in condo prices, making them a lucrative investment option.
According to statistics from Batdongsan.com.vn, the average selling price of condos in Hanoi has increased by up to 17% in the first two months of this year compared to the same period in 2023. Some projects have even recorded price hikes of over 20% in just one year.
The prices of affordable condos range from 30-35 million VND/m2, mid-range condos are priced around 35-50 million VND/m2, and high-end condos are priced above 50 million VND/m2, with the most common price range being 60-70 million VND/m2. For instance, in the western area of Hanoi, the lowest announced price for a condo is 66 million VND/m2, excluding VAT.
The limited supply of condos in the market compared to the high demand is the main reason behind the surge in prices, according to Mr. Nguyen The Diep, Vice President of the Hanoi Real Estate Club. Buying a condo has become increasingly difficult for people due to their rising need for housing, limited new projects, and limited income, while condo prices continue to skyrocket. This presents a significant challenge for individuals with low incomes. Moreover, as the country rapidly urbanizes, the demand for housing from rural areas to cities is also increasing. In the future, condo projects will continue to increase in price due to scarcity, and developers will have to optimize profits as costs rise.
To overcome these difficulties and cool down the condo market, the Prime Minister has instructed the Ministry of Construction to guide real estate businesses to restructure and reduce prices of their products. The government aims to provide appropriate and timely solutions to restructure the market for those with real housing needs, including social housing, worker housing, and low-income individuals.
The Ministry of Construction is also working on completing guidelines for implementing amended Land Law and Real Estate Business Law. Alongside this, efforts are being made to remove obstacles and expedite the implementation of projects, especially housing, urban, and industrial projects. These actions will have a significant impact on the market.
From an expert’s perspective, Mr. Nguyen The Diep believes that the key solution to cool down condo prices is to address the supply issue. However, to successfully resolve the supply issue, underlying problems related to mechanisms and policies must be tackled. “Many policy-related mechanisms, such as land clearance compensation or land tax issues, need to be more flexible,” emphasized Mr. Diep.
According to the Ministry of Construction’s statistics, with the current population growth and housing demand, the country needs to add approximately 70 million square meters of urban housing every year. However, due to the current supply situation, Vietnam faces a shortage of about 300,000 housing units annually, resulting from new urban households emerging, especially the younger generation’s desire for independent living. Thus, if the government and relevant agencies do not intervene with timely solutions, the housing shortage will inevitably continue to drive condo prices even higher in the future.