Falling demand fails to depress Hanoi old apartment prices

By Ngoc Diem   May 19, 2024 | 08:15 pm PT
Falling demand fails to depress Hanoi old apartment prices
Old apartment buildings on Hanoi's Ring Road No.3. Photo by VnExpress/Ngoc Thanh
Prices of old apartments in Hanoi have not decreased though the market has cooled off and there have been few transactions in recent weeks.

Over the last month Le Cuong, an experienced broker, has only managed to sell two old apartments in the eastern part of the city, down nearly 70% from early March when the market was booming.

Then he used to take nearly 10 interested customers to view apartments every week, and many would buy after a single tour.

Now fewer people are calling to ask about listed apartments and even fewer are interested in viewing them properties after hearing the price, he said.

Last week he only had six apartment tours but failed to sell anything.

The director of an apartment trading floor in Nam Tu Liem District said transactions had decreased by 60% over the last month.

Real estate listing platform Batdongsan said interest in the apartment segment has plummeted from its peak in March.

Nevertheless, prices are not showing any sign of decreasing though they have stopped increasing since mid-April.

In Nam Tu Liem’s Tay Mo urban area prices rose by 15% since the beginning of the year before plateauing.

At an apartment block on Chau Van Liem Street in the same district prices appreciated by 30-33%.

According to Cuong, only a small number of sellers who urgently need to liquidate their apartments have offered discounts.

Most of these discounted units have not issued title deeds and are far from the city center, he added.

Nguyen Van Dinh, president of the Vietnam Association of Realtors, said the segment has cooled because more people have become aware of the price inflation in the market and overcome their "fear of missing out."

But prices are unlikely to decrease since housing supply is unable to keep up with demand, he said.

Nguyen Quoc Anh, Batdongsan’s deputy CEO, said it is difficult to increase housing supply at the flick of a switch.

With amendments to the Land Law and Real Estate Trading Law set to take effect soon and raise the bar for property developers, supply might continue to be constrained, he said.

Apartments are sought-after because they are relatively stable long-term investments, he said.

Considering the increases in rents and prices, apartments have returned 12% a year in the last decade or so he said.

"They outperform other asset classes such as stocks and cash."

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