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Search for apartments falls due to proposed cap on ownership term

Many buyers have become less interested in apartments after hearing that the Ministry of Construction (MOC) has proposed the setting of a cap on the term of apartment ownership. Despite this, apartment prices remain high.

The newly released data from Cho Tot Nha, a real estate website, indexes the interest and search for apartment information in Q2 2022 in HCM City. It   decreased in all market segments, including affordable, mid-end and hi-end apartments.

A representative of Cho Tot Nha said three factors have affected apartment demand. First, commercial banks have tightened lending to the real estate sector. Second, prices are on the rise or have stayed high in most areas. Third, people are worried about the limited ownership time of apartments. 

These concerns were raised after MOC proposed setting a cap on apartment ownership at 50-70 years. Most people want to have ownership for life.

The number of searches for affordable apartments (less than VND35 million per sqm) in HCM City in Q2 decreased by 27 percent compared with Q1, while mid-end apartments (VND35-55 million per sq m) fell by 33 percent and high-end apartments by 35 percent.

However, while the number of searches decreased, the contacts for making transactions increased in the all three market segments, as buyers spent time learning about prices and arranging financial plans for the second quarter. 

Regarding apartment selling prices in the central business districts of HCM City, Cho Tot Nha reported that district 11 was the only area that saw prices fall in Q2, by VND3 million per sqm.

The apartment prices in district 3 continued upward in Q2 with an increase of VND1.5 million per sqm as of the end of the quarter in comparison with Q1. As such, prices have increased by VND12 million per sq m so far this year. 

Despite the signs of sharp falls in April and May, selling prices of apartments in district 5 still increased by VND4 million per sq m as of the end of Q2.

In Binh Thanh district, the sharp rise in May and June pushed average prices up, reaching VND65 million per sq m, or VND12 million more than Q1 2022.

As for the suburbs, Binh Chanh district reported a slight increase of 4 percent a month, reaching VND33.9 million per sq m in June 2022. Meanwhile, Nha Be district saw stable prices in Q2, with the price reaching its peak in April and then decreasing in following months to VND32.1 million per sq m.

Duy Anh

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