Real Estate Market: Apartment Prices Rise as Supply Tightens
Real Estate Market: Apartment Prices Rise as Supply Tightens
Limited supply of apartments, low liquidity
According to a report from the Ministry of Construction, the supply of apartments has sharply decreased. In the second quarter of 2023, there were only 7 housing projects (852 apartments; 1,572 individual houses) with a total of 2,424 units. This is about 50% compared to the first quarter of 2023 and approximately 29.17% compared to the second quarter of 2022.
The number of qualified real estate projects, apartments ready for sale in the future, and projects assessed and accepted by the Ministry of Construction in the second quarter of 2023 amounted to 51 projects with 6,205 units. This is about 98.08% compared to the number of projects in the first quarter of 2023 and about 63.75% compared to the second quarter of 2022.
According to compiled data from local construction departments reporting (58/63 provinces), there were 96,977 successful transactions in the second quarter of 2023. Of these, the transactions for apartments and individual houses totaled 29,725, equivalent to about 75.61% compared to the first quarter of 2023.
Transactions mainly focused on the land segment with 67,525 successful transactions, representing about 99.98% compared to the first quarter of 2023.
Apartment Prices Increase in Major Cities, Land Prices Decrease
In the second quarter of 2023, the transaction prices of new apartments in major cities such as Hanoi and Ho Chi Minh City are evaluated to have increased in certain areas despite signs of a slowdown in the real estate market.
However, secondary transaction prices for apartments in some locations tend to decrease by 2 to 6% compared to the same period last year, with significant reductions in places like Da Nang (down 5.8%), Dong Nai (down 3.5%), and Hai Phong (down 3.1%).
The affordable housing segment, with prices below 25 million VND, remains nearly unchanged with no new projects. The average primary price of the condominium market is around 47.5 million VND/m2 (excluding VAT and maintenance fees).
Although condominium prices in Hanoi are considered high, a survey indicates that prices continued to increase in the second quarter of 2023.
The highest price increase is in projects in Tay Ho district and surrounding areas, where new condominium projects are rare, and prices are around 80 - 100 million VND/m2.
Condominium projects on Pham Van Dong, Nguyen Van Huyen, Vo Chi Cong, Lac Long Quan streets, etc., have experienced significant price increases compared to the original prices and increased by about 1 - 3% compared to the previous quarter.
In Ho Chi Minh City, ongoing condominium projects, nearly exclusive in terms of legal aspects, are scarce in the market this quarter. Despite challenges and a subdued market, apartment prices still increased by about 2 - 3% compared to the previous quarter in some projects.
However, according to the survey, the average selling prices in the past quarter also tended to decrease in some projects due to competitive pricing from new projects and various discounts offered by developers to customers.
