One such owner, Minh, had initially planned to sell his apartment in Cau Giay district. Despite the potential profit of nearly 40% from the original purchase price of 3 billion VND, he changed his mind due to the overwhelming interest from potential buyers.

The apartment was valued at 4.9 billion VND, and within a short period, Minh received numerous offers, with some buyers even willing to pay immediately. However, he decided against selling when he noticed a similar apartment listed for over 5 billion VND. Minh and his wife were considering selling to invest in land and build a garden house in their hometown, but they hesitated due to the expected further rise in prices.

According to broker Thu Huong, most sellers in the current market own multiple properties and therefore do not feel urgency to sell. The fluctuating apartment prices, coupled with high demand, ensure that serious sellers can find interested buyers.

Huong also stated that the apartment segment is currently the most profitable, with distributors struggling to meet demand. Transactions for apartments ranging from 3-4 billion VND have been closed, resulting in a minimum profit margin of 20-30% per unit. This stands in contrast to the previous period when prices typically decreased after purchase.

The Vietnam Association of Realtors (VARs) understands the hesitation among apartment owners to sell, given the ongoing upward price trend in the market. Both the primary and secondary markets have witnessed dramatic price increases, sometimes even doubling or tripling the original prices.

Data from Batdongsan.com.vn supports these observations, revealing that affordable and mid-range apartment listing prices in Hanoi have risen by approximately 20-33% between the end of 2023 and February 2024. Comparing these figures to those from 2018, the average increase ranges from 100-150%.

Several projects in Hanoi experienced notable price hikes within the first two months of 2024. For instance, projects like Royal City, The Pride, My Dinh Song Da - Sudico Urban Area, and Sun Grand City witnessed increases of around 33%. Mipec Rubik 360 and Vinhomes West Point saw a rise of 28%, while Dai Thanh Apartments increased by 27%. Other projects like Seasons Avenue, Goldmark City, Trung Hoa - Nhan Chinh Urban Area, and The Emerald saw increases ranging from 25-26%.

Although at a milder rate of 2-5%, apartment prices in Ho Chi Minh City also show an upward trend, following significant increases in the past few years. Projects like The Estella, The Opera Residence, My Khanh 3 and The Art have witnessed moderate increases in various districts.

Over the past six years (2018-2024), the number of high-end apartment projects in the HCM City market has risen from 49 to 170, while mid-range apartment projects have increased from 127 to 314. However, the increase in affordable apartments has been modest, with the number of projects rising from 639 to 679.

Sharp increase

Analysing the recent sharp increase in apartment prices in Hanoi, Nguyen Quoc Anh, Deputy General Director of Property Guru, highlighted the disparity between supply and demand as the primary factor.

"Currently, the supply of apartments in Hanoi is very scarce," said Quoc Anh. "Recent new projects only contribute about 20,000-30,000 apartments per year, while the real demand is up to 70,000-80,000 apartments."

Supporting this perspective, Dinh Minh Tuan, Director of Batdongsan.com.vn in the South, emphasised that due to limited new supply and high demand for real estate purchases, apartment prices are predicted to continue rising. This trend will lead to an increase in prices for older projects in the same areas. Consequently, both the primary and secondary markets in HCM City are expected to experience stronger price growth in the near future.

Data from the Department of Planning and Investment of HCM City revealed that the city has only approved two new housing projects for investment policies in 2022, seven projects in 2023, and just one more project by the end of the first quarter of 2024. Furthermore, many projects face challenges related to financial obligations, land, planning and legal reviews, delaying the release of apartments. As a result, the supply of apartments in the coming period will continue to trickle.

Le Hoang Chau, Chairman of the HCM City Real Estate Association (HoREA), shared his observation that the market has been experiencing a long-lasting shortage of new supply. Consequently, investors whose projects have been approved and implemented are seeking maximum profitability. It is not uncommon for projects initially intended for affordable or mid-range housing to be transformed into high-end housing strategies to maximise profits.

VARs Chairman Nguyen Van Dinh believed that an improved supply of social housing and worker housing will help stabilise apartment prices in major cities like Hanoi and HCM City. However, this segment requires time to complete the necessary legal procedures before officially entering the market.

The market is currently awaiting new regulations and laws related to the real estate sector, which aim to alleviate difficulties faced by investors and buyers of social housing and housing for workers. Once these regulations come into effect, there is an expectation of a significant surge in social housing and worker housing, ultimately leading to a more suitable price level for individuals with genuine housing needs.

Le Xuan Nghia, member of the National Financial and Monetary Policy Advisory Council, emphasised the importance of successfully restructuring the real estate market through the planned development of social housing and low-cost housing. Failure to do so may result in a repetition of the cycle where widespread high-end housing attracts speculators who drive up prices, ultimately leading to a market bubble.