For months Nam and his wife have been scouring the capital city for a new apartment to rent out.
They want a two-bedroom unit of around 60-70 square meters priced at around VND3.5 billion ($146,000).
The search has been unsuccessful as most apartments exceed their budget, persuading the couple to expand their search to the neighboring province of Hung Yen.
Nam said the cheapest project brokers recommend is priced at VND61 million per square meter.
The scarcity of affordable and mid-range housing in Hanoi has worsened this year.
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Apartment buildings in the west of Hanoi. Photo by VnExpress/Giang Huy |
New housing projects launched in the second quarter or to be launched soon start at VND60 million per square meter, but only two are available at that price.
Others have hit VND70-100 million.
Property service firm One Mount said mid-range apartments (VND30-50 million per square meter) have gone missing in Hanoi for the last five quarters.
This dovetails with data from the Ministry of Construction’s Institute of Construction Economics, which last reported new apartments at under VND60 million in the first quarter last year.
The Vietnam Association of Realtors said the market is dominated by high-end and luxury apartments, with a “near absence” of units at under VND60 million.
One Mount said luxury apartments (VND100-260 million per square meter) accounted for 40% of the 7,800 new units launched in the second quarter.
Property consultancy CBRE reported that the average price of new launches this year has gone up 33% year-on-year to VND79 million.
Nguyen Hoai An, senior director at CBRE Hanoi, said developers are “less enthusiastic” about affordable apartments due to lower profits.
“Businesses face higher land costs due to the new land price frameworks,” she said.
As a result, while supply is set to grow, prices are unlikely to come down.
Savills estimates that by 2027 Hanoi will see about 58,100 new apartments at 58 projects.
VARS experts warned that rising prices, driven by project delays and increasing land-use and construction costs, would hit affordability for young and middle-income buyers.
“This could reduce demand for owner-occupied homes and create broader implications for the real estate market and economy.”
The rising prices are already causing a reluctance to buy.
A VnExpress survey of over 7,600 readers found that 52% do not plan to buy apartments in the second half of this year due to soaring costs.
Some 21% said they would “continue to rent while waiting for more reasonable prices.”
Most respondents said they could only afford homes costing less than VND3 billion.
