Here is a summary of the week's outstanding real estate news.

Limited real estate supply, hundreds of stuck projects increase product prices

On the morning of October 28, the National Assembly discussed in the hall the report of the Supervisory Delegation and the draft Resolution of the National Assembly on the results of the thematic supervision of "the implementation of policies and laws on real estate market management and social housing development from 2015 to the end of 2023".

Chairman of the Economic Committee Vu Hong Thanh presented the report on the results of the thematic supervision "Implementation of policies and laws on real estate market management and social housing development from 2015 to the end of 2023". Photo: National Assembly

According to the monitoring report, the Vietnamese real estate market in the period 2015-2023 is divided into two phases.

Period 2015 - 2021: The real estate market develops vigorously and strongly with many types of real estate, many sources of supply, forming many new urban areas, with many new types of real estate such as: tourist apartments (condotel), resort villas (resort villa), office combined with accommodation (officetel) ...

However, a part of the real estate projects in this period are projects invested in the previous period. The structure of real estate products is not reasonable, the supply - demand imbalance, mainly targeting the high-end segment, financial investment goals, few products suitable for the income of the majority of people. Some projects have encountered legal problems, especially in granting certificates to people.

At the end of this period, almost all types of tourism and accommodation real estate encountered legal problems, partly due to the lack of adequate legal regulations, and partly due to many limitations in the process of organizing and implementing the law.

2022 - 2023 period: The real estate market declines, the operations of real estate businesses face many difficulties due to the shortcomings and limitations of the 2015 - 2021 period exposed under the pressure of the COVID-19 pandemic.

During this period, the real estate supply was much more limited than in the previous period. Real estate prices skyrocketed compared to the income growth of the majority of people. In Hanoi and Ho Chi Minh City, there was no longer a segment of apartments with prices suitable for the income of the majority of people.

In particular, a large number of housing real estate projects are facing difficulties, are behind schedule, are slow to implement, and are stalled, while the resources that businesses have invested in the projects are huge, causing waste of land and capital, increasing difficulties and costs for investors, and increasing product prices.

Ministry of Construction: Apartment prices increased by 35-40%, almost no apartments under 25 million VND/m2

While the housing price story is still hot on the National Assembly floor, the Ministry of Construction recently released a report on the real estate market for the third quarter of 2024, highlighting the "galloping" price increase of the apartment segment.

Accordingly, apartment prices in Hanoi have continued to increase in both new and old projects. In particular, in the primary market, the price level has increased by about 4-6% quarterly and 22-25% annually. Some areas even recorded local increases of up to 35-40% compared to the previous quarter.

New apartments in Hanoi are mostly in the mid- and high-end segments. Photo: Thanh Vu

“The affordable apartment segment, with a selling price of less than VND25 million/m2, has almost no transactions and products for sale,” the Ministry of Construction concluded in the report.

To prove the above statement, the Ministry reviewed the selling prices of some projects in the capital. For example, The Zurich subdivision of Vinhomes Ocean Park (Gia Lam district), the price is at 46 - 55 million VND/m2. With The Sapphire subdivision at Vinhomes Smart City (Nam Tu Liem district), the price fluctuates around 47 - 61 million VND/m2.

Next, the Lumi Prestige project (Nam Tu Liem district) has a price of up to 69 million VND/m2. The Ninety Complex (Dong Da district) - a serviced apartment project with a term of 50 years - also has a price reaching 60 - 75 million VND/m2. Not stopping there, the Viha Complex project (Thanh Xuan district) has a price of up to 75 - 97.2 million VND/m2.

“The reason for the recent increase in real estate prices is largely due to the impact of a number of factors such as increased fluctuations in land-related costs; affordable housing products are not in sufficient supply to meet market demand,” the Ministry of Construction explained about the price increase of apartments.

Housing prices are rising not because of brokers "inflating" prices

Recently, the Vietnam Association of Realtors (VARS) held a press conference with the topic “The truth about real estate brokers pushing up prices, causing market disruption”. Accordingly, Dr. Nguyen Van Dinh, Chairman of VARS, affirmed that real estate brokers are not the main reason for the recent increase in housing prices.

“The decision on real estate selling price is the right of the investor and developer. Real estate brokers are not allowed to participate. They have access to the investor's price list almost at the same time as customers/investors,” VAR said.

Brokers also hope that house prices will "cool down" so that they can close deals soon. Photo: Dung Minh

Mr. Dinh even emphasized that the higher the housing price, the more difficult it is for brokers to sell. More than anyone else, brokers are the ones who want the real estate price to be at the most suitable level. Only then will sales become more favorable, and brokers will have the opportunity to receive commissions.

According to Mr. Le Dinh Chung, General Director of SGO Homes, the trend of increasing real estate prices is inevitable. However, the strong growth in prices in a very short time is unusual. It is unreasonable to completely blame the brokers.

“Moreover, real estate brokers are the ones who do not want house prices to increase the most. Because when investors sell at high prices, the opportunity to close a deal will be more difficult, brokers will have a harder time, but in reality, the brokerage fees they receive will not change,” Mr. Chung commented.

From the perspective of Ms. Ho Thi Thu Mai, Director of Housing Now, because the demand for housing is not met by the primary market, the price of secondary housing has increased simultaneously. The investor of the primary project, in turn, bases the secondary price and the demand for housing of the people to determine the selling price. Therefore, the price of primary housing has also increased.

Hanoi plans to keep the maximum ceiling price for apartment services at 16,500 VND/m2/month.

The Hanoi People's Committee is seeking public opinions on the draft Decision promulgating the price framework for apartment building services in the city.

Accordingly, for apartment buildings without elevators, the minimum service price is 700 VND/m2/month, maximum is 5,000 VND/m2/month. For apartment buildings with elevators, the expected minimum service price is 1,200 VND/m2/month; maximum is 16,500 VND/m2/month.

The above price does not include revenue from the apartment building's service business; does not include high-end services such as sauna, swimming pool, cable TV, internet or other high-end services.

Hanoi proposes social housing rental price from only 48,000 VND/m2/month

According to the draft Decision on promulgating the rental price framework for social housing invested and constructed without using public investment capital or trade union financial resources in Hanoi, the proposed rental price framework is as follows.

The rental price of social housing in Hanoi is lower than that in Ho Chi Minh City. Photo: Thanh Vu

Social housing buildings with a height of less than 10 floors, the rental price will be from 48,000 - 96,000 VND/m2/month.

Social housing buildings are 10-20 stories high, with rental prices ranging from 49,000-98,000 VND/m2/month.

Social housing buildings are 20-30 stories high, with rental prices ranging from 73,000-146,000 VND/m2/month.

Social housing buildings with heights of 30 floors or more have rental prices from 99,000 - 198,000 VND/m2/month.

The above prices do not include value added tax; construction maintenance costs; operation management service prices; costs for purchasing interior equipment and household appliances in social housing; costs for purchasing fire and explosion insurance; vehicle parking costs; domestic water; television services, remuneration for the management board and other service costs...

Ho Chi Minh City bans subdivision and sale of land in 5 suburban districts

Recently, Vice Chairman of Ho Chi Minh City People's Committee Bui Xuan Cuong signed and issued Decision No. 83/2024 on regulations on determining areas where real estate project investors and housing construction investment projects are allowed to transfer land use rights with technical infrastructure to organizations and individuals to build their own houses in the city.

Ho Chi Minh City has officially banned the subdivision and sale of land in 5 suburban districts. Photo: Le Toan

Accordingly, investors of real estate projects and housing construction investment projects throughout the city are not allowed to transfer land use rights with technical infrastructure in real estate projects and housing construction investment projects to organizations and individuals who build houses themselves.

Investors of real estate projects, housing construction investment projects with the goal of resettlement using land in communes, towns, and districts of the city, must ensure the conditions prescribed in Article 31 of the Law on Real Estate Business 2023 and Clauses 1 and 2, Article 45 of the Land Law 2024. Investors are allowed to transfer land use rights with technical infrastructure in real estate projects, housing construction investment projects with the goal of resettlement using land to individuals who build their own houses.

Ho Chi Minh City stipulates the minimum area for dividing residential land plots is 36 m2.

On October 31, the Ho Chi Minh City People's Committee issued Decision No. 100/2024/QD-UBND stipulating the conditions for land division, land consolidation and the minimum area for land division in Ho Chi Minh City. This Decision takes effect from the date of signing and replaces Decision No. 60/2017 of the City People's Committee stipulating the minimum area for land division.

Specifically, for land plots in area 1 including districts 1, 3, 4, 5, 6, 8, 10, 11, Go Vap, Binh Thanh, Phu Nhuan, Tan Binh and Tan Phu, the minimum area for land division is 36 m2, with the frontage width and depth of the land plot not less than 3 m.

Ho Chi Minh City stipulates the minimum area for land subdivision is 36 square meters for central districts, and 80 square meters for suburban districts. Photo: Le Toan

Area 2 includes districts 7, 12, Binh Tan, Thu Duc City and towns of districts with a minimum area of ​​50 m2, with a frontage width and plot depth of not less than 4 m.

Area 3 includes Binh Chanh, Nha Be, Cu Chi, Hoc Mon, Can Gio districts (except towns) with a minimum area of ​​80 m2, with a frontage width and plot depth of not less than 5 m.

For agricultural land, the minimum area for subdivision of land for annual crops and other agricultural land is 500 m2. For land for perennial crops, aquaculture land, salt-making land, and concentrated livestock land is 1,000 m2.

Regarding the conditions for land division, land division and land consolidation must ensure the principles and conditions stipulated in Clause 1, Clause 2 and Clause 3, Article 220 of the Land Law. Accordingly, land to be divided and consolidated must ensure access; be connected to existing public transport routes; ensure water supply, drainage, etc.

In case the land user reserves a part of the land plot area for a walkway, that walkway shall be agreed upon by the parties and the People's Committee of the district, town and Thu Duc City shall be responsible for considering the actual situation in the locality to consider whether the walkway agreed upon by the parties ensures fire prevention and fighting, water supply and drainage systems, and electricity to obtain approval before implementing the land plot separation or land plot consolidation.

The land area determined to be used as a walkway for multiple plots of land (2 plots or more) will be converted to a common use form on the land use rights certificate and property ownership rights attached to the land.

This Decision applies to organizations, households, and individuals who have the need, rights, and obligations related to the implementation of land division and land consolidation procedures. Competent state agencies shall carry out procedures for land division and land consolidation in accordance with the provisions of law.

Da Nang "finalizes" rental prices for social housing and worker accommodation in industrial parks

Recently, the People's Committee of Da Nang City has also issued a price frame for renting social housing and workers' accommodation in industrial parks in the city.

Accordingly, for social housing projects invested in construction not using public investment capital or trade union financial resources, the lowest rental price range is for apartments under 5 floors (without basement) with a maximum rental price of VND 88,000/m2/month, and a minimum of VND 57,000/m2/month.

The highest rental price range is for apartments from 24 floors to less than or equal to 30 floors (2 basements) with a maximum rental price of VND 165,000/m2/month, minimum of VND 104,000/m2/month.

Regarding the rental price frame for social housing invested and built by individuals, Da Nang stipulates that individual houses (1 floor, closed apartment, load-bearing brick wall structure, reinforced concrete roof poured in place) have a maximum rental price of VND 58,000/m2/month, minimum of VND 39,000/m2/month.

Single-family houses (2 to 3 floors, reinforced concrete structure; brick walls; cast-in-place reinforced concrete floors and roofs, no basement) have a maximum rental price of VND 88,000/m2/month, and a minimum of VND 61,000/m2/month.

Individual houses (from 4 to 5 floors, reinforced concrete structure; brick walls; reinforced concrete floors and roofs cast in place, no basement) have a maximum rental price of VND 96,000/m2/month, a minimum of VND 66,000/m2/month (for construction area under 50 m2) and a maximum of VND 75,000/m2/month, a minimum of VND 51,000/m2/month (for construction area from 180 m2 or more).

For the rental price range for workers' accommodation in industrial parks, the lowest rental price range is for apartments under 5 floors (no basement) with a maximum rental price of VND 84,000/m2/month, and a minimum of VND 54,000/m2/month.

The highest rental price is for apartments from less than 24 floors to greater than or equal to 30 floors (2 basements) with the highest rental price being 158,000 VND/m2/month, the lowest being 100,000 VND/m2/month.