Vietnam Real Estate: Prices spike in Vietnamese property
Vietnam real estate prices have increased rapidly in the past two years despite the difficulties caused by the Covid-19 pandemic, which reduced the incomes of the majority of the population, experts have said.
The Ministry of Construction | Vietnam real estate
The Ministry of Construction released a report in the second quarter of this year, saying that there was no new property inventory in the primary market.
In the April-June period, the total number of transactions in the real estate market was 29,949, an increase of 18 per cent from the first quarter. There were 29,557 houses eligible to be sold while the supply of tourism-related real estate decreased.
The Ministry’s Statistics
The ministry’s statistics showed that the absorption capacity of the market in the second quarter was better. The estate inventory was almost exclusively available to secondary investors.
In Hanoi, there were 1,094 successful transactions, down 80 per cent on a quarterly basis, and 3,002 in Ho Chi Minh City (HCMC), down 13 per cent quarter-on-quarter. There were 6,386 successful transactions in the northern region, and 7,300 and 16,265 in the central and southern regions. These transactions were mainly in the middle- and high-end segments. Vietnam’s real estate
The Ministry Reaffirmed
The ministry reaffirmed that the housing market is still stable. The transaction prices in most localities tended to have increased slightly over the same period last year. The housing supply was still concentrated mainly in the mid-end and high-end segments while that of social and low-priced housing remains limited.
The prices of apartments in Hanoi and HCMC increased by five-to-seven per cent compared to the previous period. In the urban areas, there were almost no apartments with prices below 25 million dong ($1,100) per sqm. The supply of this type of apartment is increasingly limited while demand is still high, this is leading to price increases.
Currently, mid-end apartments are still the dominant product in the market and accounted for the majority of the new supply in the second quarter of the year. The transaction price of mid-end apartments also increased in some areas such as Hai Ba Trung, Thanh Xuan, Hoang Mai (Hanoi); District 5, Thu Duc (HCMC); and Di An (Binh Duong). Vietnam’s real estate
The Rental Price of Apartments
The rental price of apartments still tends to be decreasing quarterly compared to the end of 2020. The average decrease of the whole market was about three-to-five per cent.
Another report on the property market in Hanoi in the first half of the year from Savills showed that the highest increase in estate prices was in the low-rise segment, followed by apartments. Specifically, the average price of villa and terrace houses increased 15 per cent and 32 per cent in the second quarter. Hoai Duc district took second place with a 29 per cent increase for villas and a 38 per cent increase for terrace houses. The average selling price in the Hanoi apartment segment also reached $1,625 per sqm, up by 11 per cent year-on-year.
Vietnam Real Estate Brokers Association secretary-general Nguyen Van Dinh
Vietnam Real Estate Brokers Association secretary-general Nguyen Van Dinh said the scarcity of housing was the main reason behind the price hike, which he said has made the dream of settling down for the majority of people much more difficult to achieve.
Over the past two years, the real estate market has faced a serious supply shortage, mainly due to the limited land for housing developments in large urban areas, the high cost of land and the prolonged project licensing period.
Lengthy inspections and legal checks of licensed projects in particular made new supply tight, further causing housing prices in many provinces to rise.