Apartment prices continue to rise in major cities

By Phuong Anh November 18, 2020 | 07:00 pm PT

Apartment buildings seen in Hoang Mai District, Hanoi. Photo by Shutterstock/Vietnam Stock Images.

Apartment prices in Hanoi and Ho Chi Minh City continued to rise in the third quarter, going up by 0.24 percent and 0.35 percent from the previous quarter.

According to the Ministry of Construction, lower-end apartments in Hanoi, often built in developing suburban areas like Dong Anh, Gia Lam and Ha Dong, have a high absorption rate of around 70 percent.

Mid- and high- priced projects, especially luxury apartments, sell much slower, and since the onset of Covid-19 many projects have seen little or no demand.

Hanoi’s Q3 new apartment supply fell 60 percent year-on-year to a five-year low of 3,100 units as Covid-19 hampered new launches, according to real estate consultancy firm Savills Hanoi.

The ministry said in HCMC a shortage of apartments led to rising prices along with high absorption rates, and developers therefore had to turn to suburban districts, leading to surging land prices in Binh Chanh, Go Vap and Cu Chi Districts.

Supply is down around 60 percent due to the impact of the pandemic and slow licensing by the city authorities.

Figures from the ministry show apartment prices were VND24.8-37.7 million ($1,068-1,626) per square meter in Hanoi; VND30-50 million in HCMC, VND23-27 million in the northern province of Quang Ninh, VND30 million in northern Hai Phong City, VND30-38 million in southern Binh Duong Province, and VND19-60 million in southern Can Tho City.

Real estate credit grows

Vietnam’s Q2 real estate loans grew 10.2 percent over the first to VND580.17 trillion ($25 billion), showcasing a recovery in demand.

Compared to the quarter-on-quarter growth of just 0.88 percent in the first quarter, showcasing a sluggish real estate market, the Q2 figure is marked improvement, reflecting a resurgence after the nationwide social distancing campaign ended late April, the construction ministry said.

Of the total, 25.9 percent of the real estate loans were for construction and maintenance of existing housing units or to acquire property deeds, it said.

The report also said that most real estate companies have resumed operations after two Covid-19 outbreaks were contained.

Foreign direct investment in real estate was $2.35 billion in the third quarter, four times that of the second, which is a good sign for the industry, the ministry said.