Apartments “stabilizing in price yet still at high levels”: Buyers continue to wait and see

The Paradox of “Stabilizing Prices Yet Still at Peak Levels”

Although apartment prices have shown signs of stabilizing over the past two months, they remain at very high levels in reality.

Primary market prices: In Hanoi, the average price has stayed above VND 100 million/m² for three consecutive quarters, currently reaching about VND 102 million/m² (up 29% year-on-year).

Secondary market prices: While prices have not increased compared to the end of 2025, the current level of around VND 62 million/m² is still 21% higher than the same period last year.

“Fake discount” phenomenon: Many listings advertised as “loss-cutting” are למעשה just sellers reducing part of their profit after a rapid price surge, rather than offering truly attractive prices for buyers.

Financial pressure from loan interest rates

Interest rates remain the biggest barrier for both end-users and investors.

High floating rates: Currently ranging from 10–14% per year, making monthly mortgage payments a significant financial burden.

“Hot potato” mentality: Using financial leverage at this time is likened to “holding a hot potato,” as buyers face heavy principal and interest payments upon project handover while market liquidity remains slow.

Declining investment attractiveness

Investors are gradually turning away from the apartment segment due to sharply declining rental returns.

Low rental yields: Typically below 2%, and only around 3–4% in major cities—much lower than bank deposit interest rates.

High capital costs: When prices exceed VND 100 million/m², rental income is no longer sufficient to cover loan interest, causing many investors to lose confidence in rental cash flow.

Pressure from future supply

Buyer hesitation is also driven by expectations that new supply will cool the market.

Surge in completions: From late 2026 to 2027, Hanoi is expected to welcome more than 28,000 apartment units from around 80 projects.

Location mismatch: About 80% of new supply is located in suburban areas, while end-users working in central districts continue to wait for options that better match their location and price expectations.

Shifts in consumer behavior

Preference for renting: Around 21% of consumers choose to continue renting to accumulate savings instead of buying under current high prices and interest rates.

Waiting for policies: Buyers are looking forward to social housing programs (with the income cap raised to VND 25 million/month) and more affordable commercial housing options.

The market is currently witnessing a “tug-of-war” between sellers, who aim to maintain high prices, and buyers, who patiently wait for price corrections. Investment strategies are also shifting from short-term speculation to medium- and long-term approaches, focusing on properties with solid legal status and truly prime locations.