In Hanoi, real estate speculators find themselves in difficulty as they attempt to sell apartments, even after dropping prices. The abundance of new, more affordable options coming into the market has caused homebuyers to hold off on purchases.
Ngoc Huyen, from Hanoi’s Long Bien District, listed her apartment for VND6.2 billion (US$236,000) two weeks ago. Despite reducing her asking price substantially, she has yet to receive any inquiries. Huyen has already paid VND1.4 billion towards her bank mortgage and is currently trying to sell the apartment for VND1.1 billion. However, brokers have warned her that attracting buyers is currently a challenging task.
Trung Hieu from Dong Anh Commune is facing a similar situation. Despite reducing the price of his VND10.2 billion apartment by VND300 million, he has been unable to find a buyer for over a month.
The market has cooled down significantly following a period of skyrocketing prices, making ‘flipping’ apartments more difficult for speculators. Duc Dung, a broker who specializes in apartments in eastern Hanoi, reveals that the number of sellers reaching out to him has increased by 30-40% from the third quarter. This starkly contrasts with the situation three months ago when most of his calls were from customers looking to buy.
Vo Huynh Tuan Kiet, director of residential markets at a property consultancy in Vietnam, notes that this year, demand for apartments has been driven primarily by speculators, rather than end-users. Asking prices of more than VND100 million per square meter are considered too steep for buyers with actual residential needs.
Nguyen Van Dinh, chairman of the Vietnam Association of Realtors, estimates that 70-80% of transactions are from investment and speculation. However, the recent cessation of low-interest mortgage packages by banks has made speculators more hesitant to apply for new loans, thereby reducing demand.
An anticipated increase in supply is also dampening the market. In this quarter alone, 11,000 new apartments are expected to enter the Hanoi market. This brings the total launches for the year to more than 32,300 units, surpassing the previous year’s number. Many of these new units are priced more reasonably at around VND50-60 million per square meter.
Dinh notes that the discrepancy between housing prices and income is discouraging many potential buyers, particularly younger ones. Instead, they are choosing to rent apartments in the city or buy units in suburban areas, where prices are more affordable.
Why are speculators in Hanoi struggling to sell their apartments?
Speculators are struggling to sell due to an increase in property supply and a cooling market, coupled with homebuyers waiting for more affordable options.
What has been the primary driver of apartment demand this year?
Apartment demand this year has largely been driven by speculators rather than end-users, contributing to the current market conditions.
How is the anticipated increase in supply impacting the real estate market in Hanoi?
The expected rise in supply is causing a dampening effect on the market. With more affordable options on the horizon, potential buyers are holding off on purchases, leading to a decrease in demand.
