The ministry’s statistics showed that in major cities including Hanoi and Ho Chi Minh City, apartment prices continued to increase in the third quarter of this year by around 4-6%, or 22-25% from the beginning of this year. In some areas, the increases were as high as 40% over the previous quarter.

There are almost no apartments being supplied with selling price below 25 million VND (986 USD) per square metre. The market only saw the supply and transactions of apartments with prices from 25-50 million VND per sq.m, the ones most in demand, priced at 50 million VND or higher.

In Hanoi, the Zurich in Vinhomes Ocean Park in Gia Lam district has a price of around 46-55 million VND per sq.m, Limi Prestige in Nam Tu Liem district is from 69 million VND, The Ninety Complex in Dong Da district VND60-75 million, The Sapphire – Vinhomes Smart City in Nam Tu Liem district 47-67 million VND, and Viha Complex 107 Nguyen Tuan in Thanh Xuan district 75-97.2 million VND.

In HCM City, Diamond Centery in Tan Phu district is selling for around 61-73.3 million VND, Stown Tham Luong in District 12 29.8-43.5 million VND, Urban Green in Thu Duc city 52-59.7 million VND, Glory Heights – Vinhomes Grand Park in District 9 40-80 million VND, The Aurora Phu My Hung in District 7 88-90 million VND, and the Beverly Solari – Vinhomes Grand Park in District 9 46.83-65.6 million VND.

The prices of villas and townhouses in projects with developing infrastructure in Hanoi are also increasing, due to the cash flow of long-term investors, priced at around 160 million VND per sq.m, or up by 3% over the quarter, and nearly 7% from the beginning of this year.

"Given housing demand, the increasing trend of housing prices is inevitable," said Le Dinh Chung, general director of real estate company SGO Homes.

"However, a sharp increase in housing prices over a short period of time is unusual. The main cause for the skyrocketing housing prices is limited supply and high investment costs, causing investors to have higher expectations for profits."

Nguyen Hoai An, director of CBRE Hanoi, said this was almost the first time ever the Hanoi apartment market saw rapid increases in prices over such a short period.

She added that over the past decade apartment prices in Hanoi had increased by an average of 5% per year, but started to increase rapidly from 2022.

According to the Chairman of the Vietnam Association of Real Estate Brokers (VARS), Nguyen Van Dinh, the recent increases in housing prices in Hanoi are unusual and unreasonable, especially in the context that the domestic economy, the market and incomes have not recovered. This phenomenon could be due to the impact of so-called “interest groups”.

“Housing prices are skyrocketing but there are few transactions. This can be a trick with a purpose,” Dinh said.

"Speculation and manipulation are inflating housing prices with a shortage of supply to blame. In recent years, the market has not seen any new projects. The housing supply is both in shortage and of poor quality, coupled with an imbalanced housing product structure.

“It is not a good sign for the real estate market. Unreasonable housing prices will bring many consequences, including rising investment and production costs and undermining competitiveness.”

Economist Dinh The Hien said that there was no market in which buying is winning, and questioned why prices kept increasing in a quiet market.

In its most recent report, the Ministry of Construction has pointed out that the increase in housing prices is partly because of the rising land-related costs, coupled with the impacts of the new land price frame.

Specifically, land use right auctions in some areas saw winning bids many times higher than the initial prices due to weak management, creating room for investors to collude with each other to pay high prices then abandon the deposits after winning the bid with an aim of establishing a virtual price level in the area to make a profit.

This will push up land and housing price levels, as well as property development costs, meaning that housing supply will fall.

Speculation and manipulation are also inflating housing prices with individual brokers and speculators taking advantage of the crowd’s lack of understanding to make a profit.

The ministry said that these were mostly individuals operating as freelancer brokers without certificates. They colluded to push up prices higher than the actual values to manipulate the market, causing damage to buyers and impacting the transparency of the real estate market.

The market also had a severe shortage of affordable homes for low-income earners in major cities as developers still faced difficulties in legal procedures, site clearance, credit access and corporate bond issuance.

It would take time for the Law on Land, the Law on Housing and the Law on Real Estate Business to work in reality and remove these roadblocks to unlock resources for housing development, the ministry said.

Furthermore, the recent fluctuations in the stock, bond and gold markets had led investors to move cash into the property market, as a prospective safe haven.

The ministry said that a combination of solutions must be implemented to remove the difficulty for the real estate market and promote its healthy and sustainable development, in which the focus will be on boosting supply.