Apartment prices have increased to a new level, particularly in center city areas.
Dang Anh Tu and his wife, from Hai Phong, were seeking to buy an apartment in Hanoi after 10 years of living in a rental. Having VND1.5 billion, they wanted a 70-square meter apartment in the area not far from their offices and their children’s schools.
However, Tu was disappointed after realizing that with that amount of money, he could only find an apartment in Hoai Duc and Dong Anh districts, which are far from the central area.
The apartments in the suburbs are priced at VND25 million per square meter, while apartments in the central districts have higher prices, about VND35 million per square meter.
“Ads say buyers just need to have from VND1 billion to buy an apartment. But when we contacted the distributors, I realized that VND1 billion is the initial amount buyers have to pay, and the payment is made in many stages,” he said.
There are only two options for Tu, either buy an old apartment in the central districts, or buy a new apartment in the suburbs.
“You won’t find any apartment priced at around VND1.5 billion in Hanoi,” said Nguyen Van Thanh, a real estate broker.
Thanh said the demand for houses and apartments priced at below VND2 billion is very high. However, the supply is low. With less than VND2 billion, one can only find houses in areas far from the center.
The apartments priced at VND20-25 million per square meter are the targets of middle-income earners. However, such apartments have not been available in the market since 2015.
According to Thanh, the apartments delivered 5-10 years ago can be bought at VND25-30 million per square meter. Some owners offer apartments at reasonable prices, but they are in the suburbs.
Even in the Belt Road No 3 area, known as the area of low-cost housing projects, apartments are sold at VND30 million per square meter, though the price was just VND20 million some years ago.
Meanwhile, at high-end housing projects, the prices are no less than VND40 million per square meter.
Some years ago, the market turned hot with a series of low-cost housing projects developed by Le Thanh Than, a well known realtor.
However, the low-cost market segment cooled quickly. A realtor once announced that he would join the low-cost market with VND700 million apartments, but he ultimately did not invest in the market segment, and changed his mind, investing in higher-end products.
Because of the high demand and low supply, the prices of apartments are escalating. According to Savills Vietnam, the primary average selling price has seen an increase of 7 percent year on year.
The Prime Minister has assigned the Ministry of Natural Resources and Environment and Hanoi authorities to check reports in local newspapers about 300 pending or abandoned real estate projects in the city.
Investors have been invited to contribute capital to real estate projects and enjoy a profit of 36 percent per annum, and have also been persuaded to buy corporate bonds at a high interest rate of 18 percent per annum.