Experts: Apartment Prices Are Unlikely to Decline, If So, Only in Specific Areas

Currently, the real estate market, particularly the segment of apartment buildings, is receiving strong attention from both investors and the public. However, expectations for a decline in housing prices in the near future seem unrealistic, especially when fundamental supply and demand factors, regulatory requirements, and macroeconomic fluctuations still face numerous challenges. In this context, if there is a price drop, it is likely to occur only in certain localized areas and to be temporary rather than an overall market adjustment. To analyze specifically, it is necessary to consider the elements constituting current real estate pricing, including supply and demand conditions, state policies, and the overall economic environment.

According to data from the Ministry of Construction, apartment prices are currently maintaining high levels, not only for newly launched projects but also for those that have been in use for many years. In some areas of Hanoi, such as Royal City, prices rose by up to 33% in the second quarter of this year; similarly, projects like The Pride and My Dinh Song Da - Sudico recorded increases ranging from 32% to 33%. Older communities, such as Trung Hoa - Nhan Chinh and resettlement apartments in Nam Trung Yen, also followed this trend, with price increases between 20% and 25%. This reflects a severe supply shortage, while demand remains robust, exerting significant pressure on market prices.

For those seeking lower-cost alternatives, they often have to opt for more remote projects, such as Binh Minh Garden Duc Giang or Le Grand Jardin Sai Dong. However, even these apartments, far from the city center, are priced no lower than VND 3 billion, ranging from VND 3.2 billion to VND 4.5 billion for two- to three-bedroom units. This poses a substantial challenge for middle-income groups, particularly in the context of high mortgage interest rates. As a result, the Hanoi real estate market has become a playing field where many potential buyers feel excluded due to price barriers.

Le Xuan Nha, General Director of BHS Property, stated that new government policies often have a certain lag in their implementation. In the real estate sector, the time for these policies to take effect and become impactful can extend to several years. Thus, he predicts that the "heat" of the apartment market will persist for some time to come. After the new real estate laws take effect, the overheating situation may cool down, but an immediate price drop is unlikely. The implementation and adjustment of policies require time for new regulations to genuinely affect market supply and pricing.

The shortage of apartment supply, which is one of the main reasons for rising prices, is expected to remain unresolved during the 2024-2025 period. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn, believes that the medium-term apartment supply will continue to be limited, making it difficult for apartment prices in Hanoi to decrease in the short term. Although the newly promulgated Real Estate Business Law, Land Law, and Housing Law are expected to solve market bottlenecks and boost supply growth, these changes will need some time to be genuinely effective. Under these circumstances, apartment prices are likely to continue to rise as supply still cannot meet demand in the short term.

Nguyen Anh Que, a member of the Executive Committee of the Vietnam Real Estate Association, also emphasized that apartment prices in Hanoi, especially in Ring Roads 1 and 2, are unlikely to decline due to a lack of new supply. Newly launched projects are typically priced high, mainly focusing on high-end products. Within Ring Road 3, if there are large-scale new projects, prices may decrease slightly in specific areas, but overall, a significant price drop is unlikely. Only in the case of major macroeconomic changes, such as a severe global economic recession affecting people's demand and purchasing power, might there be an opportunity for market price adjustments.

Given the current economic context, strong demand and insufficient supply are crucial factors that maintain relatively stable high market prices. In addition, rising construction costs and complex legal procedures make it difficult for apartment prices to decrease. Particularly, the public continues to hold expectations for a price drop, but considering factors such as material costs and inflation, even if there is a price reduction, it may not meet the expectations of most homebuyers.

It can be seen that the possibility of a significant decline in apartment prices in the near future is minimal. For those with housing needs, it is crucial to carefully consider location, financial capability, and intended use, as waiting for a price drop may take a long time and may not yield the desired results. Especially for suburban projects, although the prices are lower than in the city center, they still require substantial financial investment from buyers. To ensure future ownership of a personal apartment, buyers need to clearly evaluate their needs and make appropriate decisions, avoiding missing out due to the continuous price increase in the market.

The real estate market always has a cyclical nature and is influenced by multiple domestic and international factors, ranging from legal policies to international financial conditions. Therefore, homebuyers need to have a long-term vision, and be well-prepared in terms of finances and information to seize appropriate opportunities. Instead of over-expecting a rapid price drop, buyers should seek opportunities to purchase at reasonable prices and take advantage of preferential loan interest programs from banks. In a market full of uncertainties, choosing the right time to enter the market may help buyers stabilize asset value and reduce financial risks.