Real estate market "stormy", hidden abnormal factors

(Dan Tri) - Experts assess that the real estate market has recovered but it is still slow, uneven between segments and locations, and has some potential unusual factors.

Price increase too quickly

According to a report from the Ministry of Construction , apartment prices in Hanoi increased sharply in the last quarter, with an increase of 4-6% quarterly and 22-25% annually for new projects. In particular, the selling price of old apartments also increased significantly, in some places increasing by 35-40% compared to the previous quarter.

BIDV 's chief economist, Mr. Can Van Luc, commented that the real estate market is recovering but unevenly and has many potential unusual factors.

He said that from 2019 to now, real estate prices have increased by 50-70%, mainly in the apartment and land segment, due to a shortage of supply.

Mr. Luc also pointed out that housing loans increased slowly, only 1/3 compared to real estate investment loans, showing that house prices are still high, making people hesitant to borrow money to buy houses. He recommended that businesses consider adjusting selling prices to a more reasonable level.

According to experts, new policies on land and housing recently passed (such as the Resolution on the real estate market and social housing, piloting special mechanisms and removing obstacles for projects, piloting the implementation of commercial housing projects through agreements on receiving land use rights or having land use rights, etc.) are expected to bring significant changes to the market.

However, despite policy adjustment efforts, home ownership for Vietnamese people remains a difficult problem, especially for the younger generation.

Sharing about apartment prices recently, Ms. Nguyen Hoai An - Senior Director of CBRE Hanoi branch said: "This is almost the first time that Hanoi apartments have increased in price so quickly in such a short time."

According to her, historical analysis shows that over the past 10 years, Hanoi apartment prices have increased by an average of 5% per year. Even in the period 2009-2019, apartment prices fluctuated little, there were periods of price reduction and an average increase of only 2% per year. From 2022 until now, apartment prices in this city have only begun to increase rapidly.

Mr. Le Dinh Chung - real estate expert - said that the trend of increasing real estate prices is inevitable. However, the fact that real estate prices grow strongly in a very short time is abnormal.

An apartment building in Hanoi (Photo: Tran Khang).

"The main reason for the high real estate prices is that although supply has improved, it is still very scarce compared to demand. The high investment costs have made investors have higher expectations for profits," said Mr. Chung.

Identifying the "complicit" role of speculation

Mr. Nguyen Van Dinh - Chairman of the Vietnam Association of Real Estate Brokers (VARS) - assessed that the recent period has seen unusual increases in apartment prices, especially in Hanoi.

He believes that this phenomenon is certainly influenced by interest groups while the economic context, the market as well as people's income have not recovered. "Housing prices are high, but transactions do not appear much, this could be a trick of an investment group with unclear purposes," Mr. Dinh frankly assessed.

According to him, these interest groups are able to carry out price-inflating tricks due to the fact that the supply of apartments is having problems. In recent years, the market has not had any new projects approved for investment licenses.

Projects on the market are mostly old projects and are bought and sold again. The supply is both lacking and of poor quality, the supply for the people and low-income people is very little, the product structure is not suitable.

Ms. Pham Thi Mien - Deputy Director of the Vietnam Real Estate Market Research and Evaluation Institute - said that, in addition to the results from actual supply and demand, the market has also shown signs of "heating up". This situation is reflected in land speculation, pushing up housing prices, and the emergence of non-transparent real estate transactions.

Many small investors enter the market for speculative purposes, causing real estate prices to rise unreasonably. Signs of "heating up" are also shown in the apartment segment with the selling price of transferred apartments increasingly high, due to the "assistance" of some speculative groups.

Source: https://dantri.com.vn/bat-dong-san/thi-truong-bat-dong-san-day-song-tiem-an-yeu-to-bat-thuong-20241211164653693.htm