$130,000 will no longer get you a new apartment in urban Hanoi

In mid-2021 the woman from Bac Tu Liem District tried to buy a small new apartment at a project near her house, but were sold out quickly.

In the secondary market, their prices skyrocketed from the original price of less than VND50 million per square meter to VND60-65 million.

Not willing to pay so much, she expanded her search to two other urban districts, Nam Tu Liem and Tay Ho, but most were larger apartments priced at VND3.5-6 billion.

In August this year, after nearly a year of searching, she decided to look for old apartments instead.

But most old apartments are much costlier now compared to mid-2021, she said.

Property brokers say the number of people looking to buy old apartments has increased sharply in the last one to two years.

A survey by VnExpress found that most old apartments in Hanoi have new price floors, and not just those aged one to three years, but also ones built decades ago.

Prices of old apartments the southwestern district of Ha Dong with an area of 54-56 square meters have risen from less than VND1 billion in 2020 to VND1.3-1.4 billion now.

A 90-square-meter unit at another project in the district cost VND2.4-2.5 billion in 2020 but VND2.8-3 billion this year. Owners even list their apartments at VND3.2-3.3 billion.

In densely populated western district of Cau Giay, the prices have gone up to VND50-65 million per square meter from VND45-55 million last year.

Prices of old apartments at government projects have also increased. An apartment of about 50 sq.m in Thanh Cong area in the downtown district of Ba Dinh cost VND1.8-2.2 billion last year but VND2.2-2.5 billion now.

Real estate consultancy Savills Vietnam said the decline in transaction numbers notwithstanding, the prices of houses and apartments in Hanoi have continued to rise.

Nguyen Quoc Anh, deputy general director of realty website Batdongsan, said the second quarter of this year saw a decrease in interest in apartments in many areas, but prices increased steadily nevertheless.

The prices of luxury apartments (over VND50 million per square meter) increased by 12% during the quarter from a year earlier, he said.

In the mid-priced (VND30-50 million) and affordable segments (under VND30 million) they rose by 7% and 14%, he said.

Thus, an affordable apartment in Hanoi that cost VND2 billion last year has now become VND280 million costlier.

Anh said prices are rising mainly due to the thin supply of new apartments, especially affordable ones, which is pushing buyers toward the secondary market.

Nguyen Thi Thanh Huong, CEO of a large real estate company, said it is no longer an easy task to buy a new apartment with VND3-4 billion.

"When prices rise in the primary market, people turn to old apartments."

She said the price hike is due to various reasons, including limited supply, higher construction material prices and labor costs, delays in carrying out housing projects due to legal issues, and the mindset of considering real estate as a hedge against high inflation and economic difficulties.