The third quarter 2023 real estate market report released by batdongsan.com.vn on October 4 showed that apartments were the real estate segment least affected by the adverse impact on the market, because it serves real demand for accommodation, not for speculation.

Analysts have seen signs of recovery of interest in apartment products with purchasing demand up by one percent and leasing demand up by 6 percent in comparison with the quarter before. Of these, apartments priced at VND2-4 billion are the most wanted.

Apartment prices in 2023 remain nearly unchanged, slightly increasing by 1-5 percent in Hanoi and remaining flat in HCM City.

However, when considering the price performance from 2015 to now, analysts found that apartment price increases in Hanoi and HCM City exceeded the increase in people’s incomes.

The income of city dwellers has increased by 39 percent in the last eight years, but housing prices by 56-82 percent in the two largest cities.

Le Bao Long from batdongsan.com.vn said that it is increasingly difficult for people to buy apartments as income increases are smaller than housing price increases.

Long said that the primary prices of apartment projects in the future will also be high, because developers will have to raise prices to optimize their profits amid the push costs.

As housing prices stay high, people either lease houses or access home loans. However, not many people are planning to buy houses now because of high interest rates.

Long said that though apartments are expensive, consumers are still interested in the market segment. The segment will recover sooner than other segments, and there is no sign of price decrease in the short term.

According to batdongsan.com.vn, since 2015, apartment prices have been increasing and the demand for buying and leasing them is always high, which can bring an average profitability rate of up to 12.5 percent to investors. 

In general, apartment development can bring better and more stable profits than other investment channels, including securities, gold, foreign currencies, land and bank deposits.

The Ministry of Construction previously released a report on the property market in the second quarter, which showed the prices of new apartments in Hanoi and HCM City were high, though the real estate market turned gloomier.

In Hanoi, the apartments in Tay Ho district and neighboring areas are priced at VND80-100 million per sq m.

Hong Khanh