The apartment prices in Hanoi witnessed a decline due to increasing supply (Photo: baodatviet.vn) Hanoi (VNS/VNA) - Prices of apartments in the localmarket in the first 10 months of the year witnessed a downward trend, said Ha Quang Hung, deputy director of the Department Housing Management and RealEstate Market under the Ministry of Construction.
Hung said figures showed that there were some 1,400successful property transactions in Hanoi in October, increasing 17.9 percentfrom 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.
“The figures show that demand in the estate market is on the rise,” he added.
Sharing the opinion, Nguyen Hoai An from CBRE told onlinenewspaper cafef.vn that the sale price of apartments had reduced bothin primary and secondary markets.
Apartment prices in the third quarter saw a slight decrease from the previousquarter. The increasing number of apartments in the primary market resulted inaverage prices reducing by three per cent from the previous quarter anddecreasing 12 percent year-on-year.
An said despite the price decline, the supply of apartments in the market wasstill on the rise. This year, the supply of apartments in Hanoi was expectedto reach the record level of 35,000 apartments, three times higher than thefigure four years ago. The market was expected to have nearly 70,000 apartmentsin the 2018-19 period.
The rapid growth of new apartments would create fierce competition in themarket, making estate developers offer preferential programmes to attract homebuyers. This could affect the secondary market, especially investors, she said.
The downward trend of apartment prices has been alarming specialists since thebeginning of this year. According to the Housing Index in Hanoi of themunicipal Department of Construction, released in February, apartment prices inmany 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 pricesdepend 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 wouldbenefit from decreasing prices.
Speculation seen in estate market
According to the ministry’s report submitted to the National Assembly,information on the property market is not adequate and integrated, causingdifficulties for State management and home buyers.
The report also said this was leading to speculation.
In addition, estate inventories were still significant, especially projects inareas far from the centre which did not have completed infrastructure, despitethe decline.
As of September 20, inventories in the market were some 26.3 trillion VND (1.16 billion USD), reducing 15 percent from last year. The supply of high-endapartments wasn abundant; however, there was a lack of social housing projects.
The ministry propo𒈔sed that authorities should carefully consider the approvalof the investment licence of high-end housing projects to encourageconstruction of small apartments to ensure balance in the market.-VNA
