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Vietnam: High-end apartment prices still rising amid pandemic
High-end apartment prices continued increasing in the second quarter, according to the Ministry of Construction (MOC). Some projects are being offered at high prices of VND650-800 million per square meter.
In the second quarter of the year, banks eased lending interest rates and offered a series of preferential credit packages to support home buyers.
About 30,000 successful real estate transactions were reported in the last three months, an increase of 18 percent over the previous quarter. This included 1,000 transactions in Hanoi and 3,000 in HCM City.
MOC said the transaction prices in nearly all localities increased slightly compared with the same period last year. The supply was mostly in mid- and high-end segments, while the supply of social housing and affordable products was short.
For high-end apartments, priced at over VND50 million per square meter, prices are extremely high. The One Central Saigon project in district 1 is predicted to have a selling price of VND650-800 million per square meter.
The Grand Hang Bai, which is located in the prime area in Hanoi, is offered at VND570-700 million per square meter. Spirit of Saigon in district 1, HCMC, is priced at VND400 million, Sunshine Venicia in Thu Thiem VND150 million, The River Thu Thiem in Thu Duc City VND110 million per square meter.
Meanwhile, affordable apartments at commercial housing projects in the central area were nearly unavailable.
In Hanoi, some affordable apartment projects are offered at VND28 million per square meter in the suburban district of Gia Lam. In the suburban district of Dan Phuong, a project priced at VND20 million per square meter was reported.
In HCM City, a project in Thu Duc City is offered at VND27 million per square meter, and another in Binh Tan VND24 million. In Binh Duong province, affordable prices are selling at VND26 million per square meter.
“Affordable apartments priced at VND25-30 million per square meter only appear in a few projects that are far from the central area. The supply is short, while the demand is still high, which has led to the price increases,” the MOC report said
The real estate market these days has been stirred up by the news that a villa in Tay Ho district was sold at VND100 billion.
A real estate broker said The Lotus Center in the third phase of the Nam Thang Long Urban Area (Ciputra) mega project has 81 villas in Bloc BT05 designed with the European castle architectural style. The Lotus Center is developed by Thanh Tri Real Estate Investment JSC, while the project developer is Vimefulland, a real estate brand of Vimedimex, a pharmacy group.
Of the 81 semi-detached villas, there are six ‘super VIP’ villas in BT5C. Each of them has an area of over 400 square meters and the selling price is around VND280 million per square meter. A villa would cost at least VND100 billion.
Meanwhile, the land prices in Phu Thuong Ward in Tay Ho District in 2020-2024 set by the State are VND12-29 million per square meter. This means that the land prices at Ciputra are 10-20 times higher than the land prices set by the State.
A broker revealed that a client has ordered a villa. The transaction created a new peak in the real estate market.
In the report, MOC said that products in some segments are still not enough to satisfy market demand.
The supply of mid- and high-end apartments still accounts for a large proportion, while the supply of low-cost and social housing products cannot satisfy demand.
Some analysts said that apartment prices rose because of high costs for land, legal procedures, and short supply.
The disappearance of affordable apartments is not only attributed to investors’ strategy on focusing on high-end apartments, but also to the increase of prices of apartments of the same class.
Real estate experts said the problem now is that buyers of affordable houses have to pay more money for average-quality products.
Le Hoang Chau from HCM City Real Estate Association said that some projects had initial prices of VND30-33 million per square meter, but now are selling at VND50-55 million. This means that projects have been pushed to a higher class, though the quality remains unchanged.
Thuan Phong
Source: https://vietnamnet.vn/en/feature/high-end-apartment-prices-still-rising-amid-pandemic-764934.html