In the context of limited supply leading to continuously rising apartment prices, there has been a rare case of falling into a situation of “accidentally” selling an old apartment for a profit of billions but having difficulty finding a new home.
The housing supply has continuously become scarce in recent years, causing apartment prices to continuously increase not only in the primary segment, but also in old apartments.
In mid-December, Mr. Nguyen Van Tu (Cau Giay, Hanoi) completed the transfer of a 3-bedroom apartment with an area of 111m2 at a price of 4.2 billion VND. He said that this apartment was bought by him and his wife 3 years ago for 3 billion VND.
Because the apartment was bought from another family, before moving back in, he only had to spend nearly 200 million VND to renovate the interior. Thus, after selling, Mr. Tu made a profit of 1 billion VND compared to when he bought it.
“At the end of November, the broker contacted me and offered to buy it back for the customer. Because I was curious to know how much profit the apartment was currently selling, I agreed to let the broker take the customer to see it. After that, they informed me that they would bought it for 4.2 billion VND, seeing the attractive profit after 3 years, I agreed to sell and take a deposit to find a new, nicer apartment,” Mr. Tu said.
However, after a period of searching for a new apartment in Cau Giay district, Mr. Tu realized that in other projects, apartment prices had also increased very high and it was difficult to find a suitable and satisfactory apartment by number. money from selling the old house. If so, the apartments have been in use for many years and are relatively degraded.
“If I move to 3-bedroom apartments in other projects in Cau Giay area, I will have to compensate about 300 – 400 million VND, not including the cost of repairing or renewing the interior. I went to see some houses. The land is located in a quite deep alley, the area only fluctuates around 30m2. Therefore, to be suitable, you may have to move further to Nam Tu Liem or Ha Dong district to have enough money to buy a new apartment. Currently, I still I’m renting an apartment to stay temporarily,” Mr. Tu said.
Savills’ recent report noted that the selling prices of apartments and real estate in the primary market increased in the third quarter, extending a series of increases of 19 consecutive quarters, despite the gloomy market context.
Specifically, the primary selling price of the apartment segment reached 54 million VND/m2, up 2% quarter-on-quarter and up 13% over the same period in 2022. It can be seen that the selling price of primary apartments increased continuously in 19 quarters and 77% higher than the first quarter of 2019. The average selling price on the secondary market is 36 million VND/m2, up 2% quarter-on-quarter and up 8% year-on-year.
According to the Ministry of Construction, this price increase is due to the overwhelming proportion of new supply in the high-end segment (over 90%). Along with that, some investors have increased prices and opened additional sales on higher floors.
Dr. Nguyen Van Dinh, Chairman of the Vietnam Association of Real Estate Brokers (VARs), said that in recent times, the real estate market has been difficult but real estate prices are still anchored at high levels, even in the apartment segment. Housing in big cities still maintains its upward momentum, setting a new price level to a record high, far exceeding the income of the majority of people. This is in contrast to the decline in prices and liquidity of land products, villas, shophouses, townhouses, and townhouses.
VARS research data shows that real estate prices have increased dozens of times over the past decade. In 2021 alone, the average house price grew by double digits.
VSRS experts predict that in 2024, primary apartment selling prices will continue to increase by an average of about 3 – 8%. The reason is that short-term supply has not yet been resolved. Specifically, the number of newly licensed commercial housing projects is very small and is increasingly on the decline, especially in the affordable and mid-range segments.
