REAL ESTATE PRICE FLUCTUATIONS IN HA NOI

While the apartment segment in the Hanoi market continued to see an escalation in prices, the land plots, although still at a high level, saw a sharp drop in interest, and the number of transactions was low. Many investors worry about pushing goods because of financial pressure.

Market volatility

Mr. Le Van Bao, residing in Ta Thanh Oai commune, Thanh Tri district, used a large amount of money to invest in 3 land lots (from 60 - 70m2/lot) in Van Canh commune, Hoai Duc district close to An urban area. Lost at the time of land fever in early 2021, having the advantage of being right next to the main road, 5-seater cars avoiding each other, the investment price at that time was 65 million VND/m2.

“Over the past year, if calculated according to the gold rate, I have lost a large amount of money. After closing the deposit to carry out the transfer procedure, someone paid a difference of 5 million VND per square meter, but I did not sell. Currently having financial difficulties to sell, the initial price difference is from 1 to 2 million VND/m2 but no one has bought it for 3 months, if this situation lasts I will be forced to accept the cut. hole" - Mr. Bao shared.

The story of land investment in the "fever" stage with the desire to make a quick profit but being "buried" and facing financial pressure like Mr. Le Van Bao is not a rare case. However, this situation is still repeated by errors in the calculation of the "falling point" of the market and the common mistake of investing in the direction of the crowd.

Market research data from batdongsan.com.vn shows that in the first 6 months of 2022, the number of listings for real estate sales increased by about 22% compared to the same period in 2021, but search demand decreased sharply. 

For example, in the Hanoi market, some areas are located in the hottest areas in early 2021 such as: Thach That, Quoc Oai, Hoai Duc, Gia Lam... the level of interest in land plots decreased from 20 to 30 %. Meanwhile, in areas that are considered to be the hottest such as: Tay Ho, Hoan Kiem, Long Bien, Dong Da, Hai Ba Trung, the level of interest in individual housing also decreased respectively: 24%, 28 %, 25%, 11% and 15%.

“The big fluctuations of the market recently made investors more cautious. In addition, the request of Hanoi city to control the settlement of procedures for division of parcels for agricultural land, land including residential and agricultural land, non-agricultural land without residential land... also had an impact. strong in this segment” - Deputy General Director of batdongsan.com.vn Nguyen Quoc Anh acknowledged.

Contrary to the quiet of the land plot segment, apartments in Hanoi market recorded a continued increase in selling prices. According to CBRE Vietnam, the apartment segment peaked in the second quarter of 2022. The average secondary selling price was at USD 1,293/m2, an increase of about 9% over the same period last year, much higher than the increase in Ho Chi Minh City market (4 - 5%).

High-end projects in some central districts such as Hai Ba Trung, Dong Da, Ba Dinh recorded an increase of over 10% year on year. The demand for apartments for rent increased by 6%, the demand for apartments increased by 6% and 4% respectively for the high-end and mid-end segments, only a slight decrease of 3% in the affordable segment, while the supply of apartments was average. population is at its lowest level in the past 5 years.

“Hanois market for low-priced apartments has completely disappeared from the beginning of 2021. In the first six months of 2022 alone, the high-end segment accounted for 55% of the markets new supply. But in terms of total new supply of segments, it decreased by about 40% compared to the same period in 2021. The decrease in supply, along with the slide in construction material prices, pushed up house prices” - Division Director marketing housing project CBRE Vietnam, said Kiet Vo.

Market continues to differentiate

Realizing the reporters fact, apartment prices in Hanoi are escalating at a record level, with some projects increasing by 10-15% over the same period. The "price storm" of apartments has made the inner city almost no projects under 35 million VND/m2, districts far from the center such as Ha Dong, Nam Tu Liem, Hoang Mai ... affordable apartment prices have also touched , even exceeding 30 million VND/m2.

From a macroeconomic perspective, experts expressed their opinion about the fact that Hanoi and a number of localities continuously halted subdivision of plots and parcels, which is essential to reduce the thirst for land of speculators, helping the market to grow. healthier schools. Because if to develop in the direction of rampant, arbitrary will create a virtual fever. In the long term, authorities need to have specific and clear regulations on land to prevent the "bubble".

Particularly for the recent price escalation of the apartment segment, it is partly due to the fact that infrastructure works are being promoted; capital from commercial banks with relatively low interest rates was poured into the market. On the other hand, investors believe that land prices will continue to increase as in previous years, and they are afraid that the currency will depreciate due to rising inflation, so they shift investment in real estate...

It is forecasted that in the last 6 months of 2022, the Hanoi real estate market will continue to witness a strong differentiation between the land plot and apartment segments in terms of interest, number of transactions, as well as increase in the number of transactions. price growth, despite the fact that the transaction rate for the apartment segment is not very bright (the first 6 months of 2022, the absorption rate of apartments is just over 50% - data from the Real Estate Brokers Association). Vietnamese real estate).

“The primary price increase of the apartment segment in the Hanoi market in particular and the whole country in general, will be difficult to stop in the context of continuously escalating input costs, scarce new supply in the market. while still facing difficulties, such as inflation, legal... In the coming time, when these factors continue, the price uptrend in the primary market will continue" - expert economy, said Dr. Dinh The Hien.

Experts and managers are of the same opinion that the escalation in the selling price of the apartment segment does not bring a positive signal and is not a basis for assessing the markets recovery. after the Covid-19 pandemic. It is only the impact of objective factors, such as inflation, legal problems, and incomplete amendments to the Land Law, etc., therefore, it is urgently needed the intervention of the agency. State administration.

“The immediate solution to control the rate of house price growth in the primary market as well as maintain a stable secondary selling price is to focus on stabilizing the macro economy, controlling inflation and interest rates at a low level. Fit. In the long term, it is necessary to actively remove legal obstacles to shorten the time for project licensing and contribute to overcoming the shortage of supply. At the same time, strengthening the management of State agencies, transparent planning information, market information ... in order to limit the situation of "virtual land fever" - Deputy Director of R&D DKRA Vietnam Vo Hong Thang take.

According to Dr. Can Van Luc - Banking-finance expert: "Real estate prices still increase rapidly somewhere, it is likely due to "blowing" prices, because there is no longer a basis to increase, unless the law is adjusted. , planning information is published, infrastructure is invested... but there are still necessary measures to avoid phenomena such as 2021, including accelerating supply, especially social housing. , housing for workers. The government and localities are regulating to help the market return to true value."

Source: Kinhtedothi.vn