Hanoi: apartment prices witnessed a downward trend
The apartment prices in Hanoi has recently witnessed a decline due to increasing supply.
Prices of apartments in the local market in the first 10 months of the year witnessed a downward trend, said Ha Quang Hung, deputy director of the Department Housing Management and Real Estate Market under the Ministry of Construction.Hung said figures showed that there were some 1,400 successful property transactions in Hanoi in October, increasing 17.9 percent from the previous year. Meanwhile, the number of successful transactions in Ho Chi Minh City last month rose by 20 percent from the previous month to 1,500.
Ciputra Hanoi
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Sharing the opinion, Nguyen Hoai An from CBRE told online newspaper cafef.vn that the sale price of apartments had reduced both in primary and secondary markets.
Apartment prices in the third quarter saw a slight decrease from the previous quarter. The increasing number of apartments in the primary market resulted in average prices reducing by three per cent from the previous quarter and decreasing 12 percent year-on-year.
An said despite the price decline, the supply of apartments in the market was still on the rise. This year, the supply of apartments in Hanoi was expected to reach the record level of 35,000 apartments, three times higher than the figure four years ago. The market was expected to have nearly 70,000 apartments in the 2018-19 period.
The rapid growth of new apartments would create fierce competition in the market, making estate developers offer preferential programmes to attract home buyers. This could affect the secondary market, especially investors, she said.
Somerset Grand Hanoi
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The downward trend of apartment prices has been alarming specialists since the beginning of this year. According to the Housing Index in Hanoi of the municipal Department of Construction, released in February, apartment prices in many areas of the capital have declined since 2011.
Investors this year also offered demand stimulus programmes by reducing prices, providing free interior packages and offering zero lending interest rate.
Nguyen The Diep, chairman of Reenco Song Hong Company, said apartment prices depend on market mechanism. If the market has a high number of apartments, prices will be competitive. He added that if the market shows healthy competitiveness, home buyers would benefit from decreasing prices.
According to the ministry’s report submitted to the National Assembly, information on the property market is not adequate and integrated, causing difficulties for State management and home buyers. Moreover, estate inventories were still significant, especially projects in areas far from the centre which did not have completed infrastructure, despite the decline.
The ministry proposed that authorities should carefully consider the approval of the investment licence of high-end housing projects to encourage construction of small apartments to ensure balance in the market.
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