Hanoi homebuyers despair as prices skyrocket

The 32-year-old from Bac Tu Liem District had first considered buying it in late 2020 when it was just VND1.6 billion, but hesitated as it was in a social housing project and not yet transferable.

When she revisited the property earlier this year the price had doubled. "I regret not buying it then. Now I wish I had sealed the deal," she says.

Estate agents often posted fake listings, claiming properties had been sold already or priced incorrectly, only to offer different units subsequently.

Unable to find a suitable apartment close to the city, Hong shifted their focus to properties farther from the city center. But concerns about the long commute, distance from her parents’ and her children's school made her reconsider.

Apartment buildings in Hanoi's Bac Tu Liem district, in early 2024. Photo by VnExpress/Phan Duong

Hanoi’s property prices have been rising relentlessly, with the average price of apartments in the primary market reaching VND65 million per square meter, a 10% quarterly and 24% annual increase, according to a Savills Vietnam review of the year’s first half.

Since 2020 prices have risen by 18% and 14% annually in the primary and secondary markets. Apartments priced at VND2.4-2.6 billion in a VnExpress survey in early May 2024 are now listed at VND2.7-2.8 billion.

Studio prices have increased by VND200 million, and two- and three-bedroom units by VND250 million across most districts.

Prices of older apartments near the city center, once below VND20 million per square meter, have soared.

Hong was interested in a project on Pham Van Dong Street, where apartment prices rose from VND1.2 billion in 2018 to VND3 billion by late last year and to VND3.5-3.8 billion now, with some listed even at over VND4 billion.

Despite rising prices, over 52,000 real estate transactions were recorded in Hanoi in the first half of the year, with apartments making up 54%, according to OneHousing.

Many families like Hong’s now face a dilemma: buy now and risk overpaying or wait and risk prices climbing further.

Viet Hung, 28, teaches his daughter at the home he shares with his parents in Hanoi's Hai Ba Trung District, Aug. 17, 2024. Photo by Tu Quynh

Viet Hung, 28, of Hoang Mai District and his wife have saved VND4 billion in the five years since they married but have not been able to buy a home despite searching far and wide since June 2023.

They initially looked at properties in their district while prices were still "acceptable." But by the time they chose a home, prices had gotten out of reach.

Hung monitors the market and notices that some apartments remain unsold but their prices rise by tens to hundreds of millions of dong daily, or billions over a year.

"I’d see an apartment in the afternoon, only to be told it was sold by evening, often at a higher price," he says.

Some sellers even back out after taking a deposit, expecting prices to rise further.

Eventually the couple lowered their expectations, expanding their search beyond homes near their parents.

They had considered taking a small loan for a three-bedroom apartment, but now even a two-bedroom unit of 70 square meters costs nearly VND7 billion, beyond their budget. "Even with a 20-30% income increase, keeping up with rising home prices seems impossible," Hung says.

Frustration among buyers is growing as property prices climb. In the past month several social media groups have emerged, including "The Community to Stop Buying Homes in Hanoi to Avoid Price Gouging," which now has nearly 70,000 members. "We don't want cheap houses, just fair prices," group administrator Hoang Minh Anh says.

A VnExpress survey of 3,400 readers found nearly half believe Hanoi apartments are overpriced. Many have had to lower their expectations or reconsider buying altogether due to the relentless rise in prices.

Nguyen Chi Thanh, vice chairman of the Vietnam Real Estate Brokers Association, says the Hanoi real estate market, especially the apartment segment, is experiencing irrational price increases. "It is abnormal for an apartment over 10 years old to double or triple in price."

Do Thi Thu Giang, director of consulting services at Savills Vietnam, says the revised Land Law will accelerate infrastructure development, allowing developers to acquire cheaper lands, which could lead to more affordable housing.

"Prime locations are often out of reach for first-time buyers. However, improved infrastructure will shorten travel times and provide more affordable options in surrounding areas."

Hung and his wife, like many young couples, are eager to have a home of their own.

The need for more space has become urgent as they expect their second child by the end of the year, but the soaring apartment prices have caused them to pause their search.

Thuy Hong and her husband, whose savings have grown from VND1 billion to VND4 billion over four successful years in business, had hoped to buy a house for less than VND3 billion, but may now have to fork out over VND6 billion.

"I don’t want to settle for renting, but the prices are unreasonable," she says. "After four years of hoping for a home it feels like the dream has slipped away."