After many years of searching for houses in inner-city districts of Hà Nội, Mr. Tran Anh Tu (hometown Ha Giang) had to give up his dream of owning an apartment in the city center because real estate prices in Hanoi had risen too much and were now out of reach for him and his wife were.
Mr. Tu said: “My husband and I saved about 300 million VND. None of the families can support us. So if we need to take loans, we can only take loans from the bank. However, real estate prices in the city center are now around VND 4 billion for apartments of 50 to 60 m². So even if I borrow up to 2% from the bank, I cannot meet the loan conditions due to my low income and the amount of money is not enough for 80%…“.
However, he still didn’t want to have to pay VND7 million for rent every month, so Mr. Tu and his wife decided to change direction and buy apartments in the suburbs. A suburban apartment would be more affordable. But what surprised Mr. Tu was that even though he agreed to buy a house in Gia Lam District, the price of housing here was not cheap.
“A realtor showed me an apartment on the 20th floor of an apartment complex with an area of 60 m2 and a price of VND 3 billion. Therefore, the amount of 300 million VND for my wife and I is only 1/10 of the value of the house and is not eligible for a bank loan.said Mr. Tu sadly.
The prices of many apartments in the suburbs of Hanoi are also astronomically high. (Illustration photo: Internet)
Mr. Tu continues to look for apartments in other areas such as Hoai Duc, Thanh Tri, Dong Anh…, but the situation is not very positive as apartment prices here are all around 50 million VND/m2, which is roughly equivalent to around 3 billion VND for a 60 m² apartment.
“I thought a suburban apartment with a small area would cost around 1.5-2 billion VND. However, this type of apartment is no longer on the market. The cheapest apartment the agent took me to was also priced at VND2.2 billion. With real estate prices like these, my husband and I are thinking about borrowing from friends before we can borrow more from the bank“said Mr. Tu.
In the same situation as Mr. Tu, Ms. Tran Nguyet Minh (Hometown Hai Duong) also shared his story of how he found a home full of hardships. Ms. Minh said that after many years of work, she and her husband had accumulated VND500 million and planned to buy a small house in Hanoi to make it easier for the whole family to travel to work and school. However, Ms. Minh was disappointed when housing prices in the city center were around VND1 billion to VND4 billion.
“Every month I have to pay about 8 million VND in rent, so I really want a house, no matter how small, to reduce these costs every month, so the couple decided to take a loan from the bank to buy a house.“, shared Ms. Minh. However, given the high property prices, she and her husband were unable to meet the bank’s loan conditions.
According to the broker’s introduction, in the suburbs of Hanoi, many projects are currently being built in modern urban areas with good infrastructure connectivity, so moving to the city center does not take too much time. And above all, the price of the house will probably be much cheaper than a house in the city center. Ms. Minh thought it was sensible and decided to look for an apartment in the suburbs.
However, when the agent took her to view the house, Ms. Minh involuntarily felt “dizzy” because the prices of suburban apartments were all around VND70-90 million/m2.
“The agent gave me an apartment of around 1 square meter. I was very happy because it was in a modern urban area, with a swimming pool and playground. But when I heard that the price was 60 million VND/m2, I was really shocked. After a lot of research, I discovered that real estate prices are still extremely high, even if I have to drive up to 89 km to work.“, complained Ms. Minh.
The prices for suburban apartments are not exactly cheap
According to real estate experts, housing prices on the outskirts of Hanoi have also risen quite sharply recently because prices for inner-city apartments have been inflated too much.
For example, in Hoai Duc district, the selling price of apartments in the An Lac Green Symphony, The Wisteria project ranges from almost VND 60 million/m2 to VND 73 million/m2. An apartment with an area of 108 m2 designed for 3 bedrooms here is sold for 7.5 billion VND, which is more than 69 million VND/m2.
Many people have to give up their dream of buying a house in the suburbs of Hanoi.
In Gia Lam district, there are apartments priced from 80 million VND/m2 to over 90 million VND/m2. An apartment with an area of 62 m² is offered for sale for VND 2 billion, which is almost VND 5.7 million per m².
In Dong Anh District, apartment prices are also between 40 and 60 million VND/m2. A 58 m² apartment is for sale for VND 2 billion, which is almost VND 3.6 million per m².
Mr. Nguyen Quoc Khanh, vice president of the Vietnam Association of Real Estate Brokers (VARS), noted that not only housing prices in the city center have risen sharply, but also housing prices in the suburbs have now reached a new level, up to around 60 % – 70 million VND/m2.
“This is something I never expected in the last 15 years. That price is not much lower than many inner-city areas, making it increasingly difficult for people, especially middle- and low-income people, to own a home.“, commented Mr. Khanh.
Herr Vu Cuong Quyet, CEO von Dat
Mr. Quyet explained the fact that although suburban housing prices are far from the center and in many cases are worse than those in the city center, prices continue to rise, saying that the reason is due to the increased construction costs and the release compensation of the land The price is high and the tax is also high, so it is difficult for investors to sell cheaply.
In addition, the current market has not experienced difficult times, so not many investors are participating, while the supply of inner-city housing is too low, leading to an increase in suburban housing prices.
Furthermore, with land resources becoming increasingly scarce, it is not easy to develop social housing, driving up suburban housing prices.
From another perspective, Mr. Nguyen Quoc Anh, deputy director of PropertyGuru Vietnam, analyzed that the continuous increase in land prices has pushed up housing prices. If land prices increase by 20-30% each year, housing prices will increase by about 9-10% each.
In addition, the concept of the central area of Hanoi has also changed a lot. Previously, Hoan Kiem was the core district of the city, the neighboring districts of Dong Da, Hai Ba Trung, Ba Dinh, Cau Giay… were considered the central districts of Hanoi. But recently, areas with developed infrastructure, good connections and a comprehensive range of services and supplies are also considered central areas. This is also why suburban housing is “coming to life” and prices are rising.
Mr. Nguyen Van Dinh, Chairman of Vietnam Real Estate Brokers Association, also said that the prices of apartment buildings in areas far from the center, such as Dong Anh, Nam Tu Liem, Ha Dong, Nam Tu Liem, Gia Lam, are continuously increasing has increased in recent years due to increasingly improved infrastructure.
In particular, there has been investment and construction in ring roads, highways and bridges over the Red River, improving connectivity between these areas and the city center and thereby driving up property prices.
Another reason is that the policy mechanisms are not synchronized, resulting in supply not matching demand. Projects are not approved or are only approved with great difficulty, while the demand for living space is increasing, especially in large cities. This causes property prices to rise across the board, making it difficult for low-income people to buy homes in the inner city and making them increasingly inclined to move to the suburbs. The high demand means that supply quickly runs out and prices for suburban housing rise in line with market rules.
Chau Anh
