House prices are falling, opportunities are gradually brightening

Affordable housing, suitable for middle- and low-income earners in Hanoi and Ho Chi Minh City, is increasingly scarce, while the supply of high-end and super-luxury housing is increasing.

Real estate area under construction in District 7 (HCMC) - Photo: QUANG DINH

The imbalance between supply and demand is making the "dream" of settling down increasingly out of reach for many people...

And to rectify the imbalance between supply and demand, in a recent meeting on the real estate market situation, the Government Standing Committee requested the Ministry of Construction , the State Bank, and relevant ministries and localities to implement a series of solutions to remove obstacles such as creating land funds, researching medium-term credit packages, stable interest rates for commercial housing projects with suitable prices, and credit packages for young people to borrow to buy houses.

At the same time, we must strictly handle price inflation and creating virtual fever to control housing prices.

Housing prices are skyrocketing

According to the Ministry of Construction, in the first months of 2025, the real estate market will have many improvements, with supply and real estate transaction volume increasing compared to the same period in 2024.

However, the supply is still limited, not meeting the market demand, the product structure is not balanced, there is a lack of housing suitable for the needs of workers and young people; there are too many villas and low-rise houses; the price of real estate and housing is not suitable for the ability of those in need. Speculation, manipulation, price inflation and market disruption still exist.

In Ho Chi Minh City, most of the projects that opened for sale from the end of last year to the second quarter of this year focused on the high-end and luxury apartment segment, with prices ranging from 100 - 150 million VND/m², even higher in the central area.

According to a survey by Tuoi Tre in the eastern part of Ho Chi Minh City, apartments in new projects in Thu Duc City are being offered to buyers at prices above 100 million VND/m². There are some projects in the area near An Phu intersection (Thu Duc) that are "offering" prices up to 120 - 150 million VND/m².

In the southern part of the city, in Binh Chanh and Nha Be districts, projects are being sold to customers at prices ranging from 64 to 80 million VND/m².

In District 1 alone, only a few apartment buildings still have apartments in their "shopping cart" but the selling price is from 200 - 300 million VND/m², in some places up to 400 - 500 million VND/m².

Not only in the primary market, the old apartment market maintains sky-high prices. There are even projects that have been in operation for nearly ten years but the selling price of apartments has doubled, currently trading at 4 - 5 billion VND/apartment.

According to market research units, the price of affordable apartments in the suburban areas of Ho Chi Minh City is fluctuating from 45 to 55 million VND/m². At this price, a 50m² apartment also costs about 2.2 billion VND.

Apartment buildings along Vo Nguyen Giap Street, Thu Duc City, Ho Chi Minh City - Photo: QUANG DINH

In Hanoi , housing prices have increased "dizzily" since the second half of 2024 until now, commercial apartments priced under 50 million VND/m2 have almost disappeared, even in areas outside Ring Road 3.

At a real estate trading floor in the Nam Tu Liem area (the investor is opening a project for sale in Hung Yen , Hanoi areas including: Dong Anh, Gia Lam and Nam Tu Liem), although it is a weekday, it is packed with cars, motorbikes of brokers and people coming to see the model home.

According to a survey in Nam Tu Liem area, some commercial apartment projects are being opened for sale by investors at prices ranging from 120 - 160 million VND/m2.

Ms. Minh Huong, a real estate broker, said that in Nam Tu Liem area, there are no more apartments under 50 million VND/m2. A project next to Le Quang Dao street is also offering prices of 120 - 150 million VND/m2, excluding value added tax and maintenance fees.

For apartments with good views, the price is about 150 million VND/m2. Three-bedroom apartments of about 100m2 also cost from 13 to 15 billion VND.

In addition, some apartments that have been put into use in Thanh Xuan area (Hanoi) are being offered for sale by brokers at 74 million VND/m2, or apartments in the commercial apartment complex on Pham Van Dong street (Bac Tu Liem) are also being offered at 67 million VND/m2.

When land prices are cheap, many types of real estate will appear such as townhouses and apartments with cheap prices. When the supply is abundant and diverse, it will create competition between types of housing, forcing apartment prices to decrease. And to have affordable housing prices, policies must be transparent and clear, especially in granting construction permits, granting red books and dividing plots for people.

Mr. Tran Khanh Quang (Director of Viet An Hoa Company)

Housing prices increase due to procedural bottlenecks

Speaking with Tuoi Tre, Mr. Nguyen Hoang Minh - Deputy General Director of Saigon 5 Real Estate Development Joint Stock Company - said that housing prices in big cities like Ho Chi Minh City are being pushed up too high, partly due to congestion in administrative procedures.

Take the example of a business project that has been in development since 2018 but is "stuck" in procedural stages, causing the expected housing price to increase at least double compared to the original price.

Mr. Minh cited that this company's project in District 8 was initially launched on the market at a price of 26 - 28 million VND/m² before 2020.

However, due to legal problems, the project has been temporarily suspended until now, causing the enterprise to bear an additional bank interest of more than 51 billion VND, not to mention many other financial costs that have also increased.

Therefore, if the project is deployed and opened for sale this year, the business side also plans to recalculate the selling price to at least double because in addition to financial costs, other costs will also increase such as construction materials, construction costs, business costs...

"If the procedures were not complicated, we would have built quickly, sold quickly and people would have settled down in 4-5 years. But the project is slow to develop, so that financial expense will eventually be added to the selling cost, which home buyers will have to bear, making the house price not as cheap as people and businesses want," Mr. Minh explained.

According to Ms. Duong Thanh Thuy - Vice President of Trung Thuy Group, for apartment projects, land price only accounts for 30%, financial costs account for 30% if the project is completed within three years and construction costs were only 15% in the past but have now increased to 20 - 25%.

According to her, these are "hard" costs, so if the project is slow in legal procedures leading to delays, if it is extended for four years, the financial costs will increase by 40% or longer, which means the financial costs will also "bloat".

There will be no affordable housing if land costs are high and financing costs increase over time as is happening in many housing projects.

Sharing the same view, Mr. Tran Khanh Quang - Director of Viet An Hoa Company - said that the most important factor for real estate prices to be affordable is cheap land prices. The cost of construction materials does not affect the overall real estate price much.

For a 50m² apartment priced at 5 billion VND in the center of Ho Chi Minh City, the material cost is only about 1 billion VND, accounting for a small part of about 15 - 20% of the selling price.

People complete house construction procedures in Binh Thanh District, Ho Chi Minh City - Photo: HUU HANH

Need help for first-time homeowners

To overcome the shortage, businesses and experts all believe that solutions are needed to rapidly increase housing supply, especially in the affordable housing segment.

In addition, there should be policies to support first-time homeowners, regardless of age, with the most obvious form of support being interest rate policies.

Based on the fact that land funds in the central areas of Hanoi and Ho Chi Minh City are scarce, Mr. Nguyen Van Dinh - Vice President of the Vietnam Real Estate Association - said that it is necessary to plan and reserve land funds in the suburban areas of the two cities to develop affordable housing.

In the immediate future, priority should be given to land plots with available transport infrastructure connections to the centers of the two cities to build affordable housing.

For the remaining areas, planning land for commercial housing at suitable prices needs to be synchronized with investment in connecting traffic infrastructure to create a place for people to live.

In addition, to develop affordable housing, a specific strategy is needed, in which the Government needs to sit down with localities to plan the development of affordable housing for people in provinces neighboring Hanoi and Ho Chi Minh City.

Mr. Nguyen Hoang Minh said that if state agencies quickly remove difficulties in legal procedures, businesses will soon be able to build, projects will have less financial costs and less costs that make up housing prices.

Meanwhile, the vice president of Trung Thuy Group said that it is necessary to adjust land costs and financial costs, in which the State can adjust land costs to account for about 20% instead of the current land cost of up to 30%.

In particular, it is possible to promote non-financial measures (which are essentially financial solutions) by speeding up procedures, avoiding projects falling into a state of slow implementation.

For example, instead of financial costs at the threshold of 30% for three years, the State should accompany businesses to handle the stages in just one year, then financial costs will also decrease to only 10%.

"If we can do the above two things, it is clear that the sharp reduction in project development costs will impact housing prices. Then businesses will only maintain acceptable profit margins, while the remaining housing prices will decrease and people will have easier access," Ms. Thuy added.

It is necessary to quickly resolve administrative procedures to reduce financial costs for businesses. In the photo: real estate area on Nguyen Huu Tho Street (Nha Be, Ho Chi Minh City) - Photo: TU TRUNG

* Mr. Nguyen Quoc Hiep (Chairman of Vietnam Association of Construction Contractors):

The buyer gets what he deserves.

The real estate market is experiencing a situation where "land prices chase house prices and house prices chase land prices", creating a vicious cycle of prices that ultimately end up with buyers suffering. Part of the reason for this situation comes from the floating that causes land prices to increase, with a high risk of being among the top in the world.

In the same project, just a few months between the previous and next land allocation decisions can cause the price to increase by 20%, which is unreasonable and will cause the house selling price to increase.

Therefore, it is time for the authorities to intervene, manage and control land prices in a harmonious manner.

In addition, lengthy administrative procedures such as land valuation will also cause businesses to incur additional financial costs such as loan interest or additional land costs of up to tens or even hundreds of billions of VND. These costs are all added to the selling price.

To control housing prices, it is necessary to soon have a state management mechanism on land prices, avoid the current floating situation and quickly resolve administrative procedures to reduce financial costs for businesses.

* Dr. Nguyen Quoc Hung (Vice President and General Secretary of Vietnam Banks Association):

Preferential loan packages need to be disbursed to the right subjects

Adding a medium-term loan package with stable interest rates for affordable home loans for young people is the right policy.

But for this loan package to be truly effective, it is necessary to review whether the current home buyers are buying to live in or to invest and speculate.

Most of the current transactions are investors buying and selling to investors. If this situation is not controlled, loans will not reach the right people with real home buying needs.

Furthermore, it is necessary to clearly define the beneficiaries of the loan package, the criteria and standards for borrowing capital. Ideally, this loan package should only be for first-time home buyers.

Commercial houses priced at 35 - 40 million VND/m2 are suitable.

According to Mr. Nguyen Van Dinh - Vice President of Vietnam Real Estate Association, affordable commercial housing is the type of housing that people with average and low income can buy. Therefore, the type of affordable commercial housing will range from 35 - 40 million VND/m2.

According to the calculation of the Ministry of Construction, the current unit price for building 1m2 of high-rise apartment buildings is about 20 million VND/m2, so with a selling price of 35 - 40 million VND, investors have made a profit.

As for land costs in the current apartment price structure, they usually account for 20-25% of the apartment selling price structure in areas outside the center of Hanoi. For projects in the central area, land costs can increase to 50% of the price structure.

Hanoi real estate market - Photo: NAM TRAN

Worry about no longer having the opportunity to buy a house

The dream of settling down is becoming increasingly distant for millions of people, especially young people and middle-income earners in big cities like Hanoi and Ho Chi Minh City.

Housing prices, which were already high, continue to increase rapidly while workers' incomes are stagnant, ruining the plans to own a home for many office workers and civil servants.

"I work as a judicial officer at the ward, and my wife is a notary. We have saved some money, but with the current high housing prices, my wife and I no longer have the opportunity to buy a house. We have invested the money we earned, and currently our family is still renting a house," said Hoang Van Minh (40 years old, from Thanh Hoa).

Ms. Nguyen Thu Trang (34 years old, from Phu Tho) said that after more than 10 years of saving, she had some money, but after surveying, it was still not enough to buy an apartment of about 30 square meters.

"I'm single and want to buy an apartment, but after looking at the prices, a nice one would cost around 2 billion VND. I had to rent because a 30m2 apartment in an urban area costs only around 8 million VND per month," Trang shared.

According to an expert from the Vietnam Real Estate Association, the real estate market is facing a shortage of affordable apartments, so investors are offering high prices for their products on the market.

Most of the home buyers recently are investors with the mentality of buying houses and waiting for prices to increase to make a profit, so the house prices on the market are not real.

Reasons for the increase in real estate price structure such as land price, construction material price, loan interest - Photo: TU TRUNG

Reduce procedures, reduce housing investment costs

One of the important solutions in the conclusion of the Government Standing Committee to promote the real estate market to develop in a safe, healthy and sustainable direction is to increase decentralization, delegation of power, and minimize administrative procedures.

In parallel with the request to review and clarify the causes of the increase in real estate price structure such as land price, construction material price, loan interest rate...; the Government Standing Committee also requested ministries, branches and localities to focus on minimizing unnecessary and overlapping administrative procedures, and immediately eliminate complicated paperwork and document requirements.

Ensure to cut at least 30% of processing time and 30% of administrative compliance costs. This includes studying to cut down procedures for investment approval, project appraisal, design, especially construction licensing procedures, inspection of acceptance work, reducing pre-inspection and strengthening post-inspection.

In addition, the solution is to increase supply, reduce prices, and develop diverse real estate segments to meet real housing needs, especially for people with low and middle incomes.

In particular, the Government requires research and development of policies to support young people and those with real housing needs, increase access to housing and contribute to realizing the right to housing as prescribed by the Constitution.

The State Bank is required to focus on directing and urging banks to participate in the preferential credit loan program of 120,000 billion VND. Along with that, ministries and branches are assigned to research and propose the model of "Real estate and land use rights transaction center managed by the State" on an electronic platform.

This will be a system that integrates all stages from transactions, notarization, taxes, registration... similar to stock trading. This model will ensure information transparency, prevent price inflation, tax losses and market fraud.

BAO NGOC - NGOC HIEN - QUANG THE

Source: https://tuoitre.vn/giam-gia-nha-co-hoi-dang-sang-dan-20250622092058922.htm