Economy

Sky-high apartment prices – Who benefits? Part 2: Paradoxes in investment and project implementation

PV Group - Technical: Hong Toai • October 18, 2025 06:03

The phenomenon of apartment prices in Nghe An doubling in a short period of time, in addition to "creating waves", also reveals many shortcomings in investment and project implementation.

Reporter Group• October 17, 2025

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The phenomenon of apartment prices in Nghe An doubling in a short period of time, in addition to "creating waves", also reveals many shortcomings in investment and project implementation.

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Inadequacies in project implementation

As reflected in the previous issue, the price of apartments in our country in general and Nghe An in particular increased not only due to "demand" exceeding "supply", but also due to the impact of speculators, especially secondary speculators, and the fact that many investors did not implement on schedule as committed.

A representative of the Department of Construction said that, in addition to commercial housing projects and new urban areas that have been licensed and are still in effect (of which 20% of the area is reserved for social housing funds), Nghe An province has planned 41 social housing projects with a total of 36,000 apartments in the period 2025-2030. If implemented on schedule, in the next 5 years, Nghe An will not lack the supply of apartments, and is fully capable of meeting the socio-economic development goals and urbanization speed of the old Vinh City and surrounding areas.

However, for many reasons, key projects on social housing and housing for workers have been delayed. For example, 3 apartment projects with a total of 7,600 apartments for workers at WHA Industrial Park in Nghi Thuan - Nghi Long and the project of Song Lam Cement Joint Stock Company in Nghi Tien. Although these projects have had investment approval decisions since 2022, with a plan to hand over by 2027, construction has not yet started. In addition, among the target of nearly 2,500 social housing apartments that the province has implemented in the period of 2022-2025, in reality, only 536 apartments of Kim Thi Joint Stock Company in Nam Cam Industrial Park are the real source of housing for the market, while nearly 2,000 apartments belong to worker and expert accommodation areas in industrial parks of FDI enterprises, so they are not put on the market and not sold.

In fact, to meet the housing needs of the people and serve socio-economic development, the Provincial People's Committee and the old Vinh City have implemented many solutions. Along with allowing the renovation of Quang Trung apartment complex to improve housing conditions for local people, the province has also planned and licensed a number of large apartment projects in the suburbs for investors. According to research, in the period 2017-2023, although the market was "quiet", Nghe An still licensed more than 5 projects with nearly 1,000 apartments in the suburbs. However, like previous projects, most of the projects have only just begun to be implemented.

More notably, in real estate projects and new urban areas licensed from 2023 onwards, although investors committed to reserving 20% ​​of land fund for social housing, they prioritized infrastructure, subdivision and sale of plots, and construction of adjacent villas to recover capital quickly, while social housing was left behind. As a result, when the supply of apartments in the core area is scarce, and projects in the suburbs are slow to develop, the market is unbalanced, creating opportunities for speculators to manipulate prices. In reality, in addition to prime locations, young people like to live in inner-city apartments, and in addition, apartments are also places that open up many very attractive business opportunities, with the highest profits being in health care services, food, sports, beauty, coffee, etc.

While the demand for commercial apartments and the affordable segment is increasing sharply, the supply is low and the prices are inflated, making it more difficult for low-income people and young families to access housing, high-end projects - although the real demand is not large - are prioritized for investment, causing many urban areas to fall into a state of abandonment after completion. In addition, many commercial projects have just been completed and immediately transferred to the trading floors, and these trading floors also represent investors to transact with customers, but the prices are different now.

Customers said: The floors immediately made a profit of 10%, even 50, 60% compared to the initial purchase price from the investor at different times. Customers looking for investors to buy, some investors said we only "circulate internally" and hand over to the trading floors. When going to the floor, they said the number of apartments was out and if you need, ask the investor.

Mr. Nguyen Trung Long - Head of Price and Public Asset Management Department (Department of Finance) analyzed: "In real estate segments, land subdivision and sale is the most profitable because of low investment capital and quick capital recovery, so investors actively implement. On the contrary, apartments require large capital, long construction time and low profit, so investors are often cautious. Previously, projects in the center of old Vinh City were implemented quickly because of land support and open procedures. Currently, the conditions for appraisal and licensing are stricter, so progress is slower."

Nghe An is the destination of many large investors in the real estate sector. The apartment market has real demand, so in addition to the high-end segment, businesses need to pay attention to investing in social housing and affordable commercial apartments. This is not only a business opportunity but also a social responsibility, contributing to stabilizing the market and increasing sustainable supply.

Apartment prices increase, people are further away from their dream of home ownership

As a close market follower, Mr. Nguyen Van Nam - Branch Manager of a real estate company in Nghe An said: "Before 2021, apartment prices in the old Vinh City were only about 10-12 million VND/m². From 2022, when 'big guys' like T&T and Vingroup invested, prices started to increase sharply."

Specifically, at the end of 2021, the T&T apartment project on Quang Trung Street was advertised for sale at 17 million VND/m² - 5 million higher than the average price at that time. Initially, many people were worried that it would be difficult to sell, but thanks to additional amenities such as a kindergarten and a community living area, the project quickly "sold out". This price then caused the old apartment price to increase accordingly.

Soon after, the Quang Trung Apartment renovation project, the remaining apartments were sold at 25 million VND/m². Next, Ecopark launched more than 1,000 apartments, the price in early 2023 exceeded 30 million VND/m². The following projects continuously advertised higher prices than the previous project, along with advertising, pushing the market price up. “Up to now, some apartments of large corporations have exceeded 50 million VND/m²,” said Mr. Nam.

A leader of the People's Committee of Truong Thi Ward (old Vinh City) shared: The ward currently has 33 apartment projects put into use, about 8,500 apartments. Compared to 3 years ago, the average price has increased 3 times, especially in the past year. Both new and old apartments, despite lacking amenities, have "sky-high" prices. According to him, the cause also comes from speculation, hoarding, price inflation, along with the "surfing" mentality when supply is limited. The low-interest loan policy also causes more money to flow into real estate, pushing up prices.

A survey by the Nghe An Real Estate Business Association shows that in just the past 6 months, apartment prices in the old Vinh City area have increased by about 50%, while previously they only increased by 10-12%/year. Investors say that in the context of falling savings interest rates and rising gold prices, real estate has also increased along with gold prices, becoming a safe "capital preservation" channel, contributing to the continued escalation of housing prices.

This reality makes it increasingly difficult for those who really need housing. In many wards such as Truong Thi, Hung Phuc, Vinh Tan, Vinh Hung, many low-income people are having to delay their plans to buy a house. Mr. Tran Duc Tiep, a worker renting at Nam Nguyen Si Sach Apartment, shared: “I earn about 10 million VND/month, and rent costs 3 million VND. Last year, I saved 500 million VND, planning to borrow more to buy an apartment for 1 billion VND, but now the price has increased to 1.5 billion VND, out of reach.

An apartment broker in Vinh Loc ward also said that the "hot" price increase reflects speculative psychology. "Many secondary investors and brokers together 'create waves', push up prices, causing the market to fall into virtual scarcity. When prices are pushed too high, real buyers cannot squeeze in," he said.

A representative of the Department of Enterprise and Labor Management (Southeast Economic Zone Management Board) commented: “Housing prices are now far beyond the affordability of most people, especially workers and middle-income workers. With an income of 7-10 million VND/month, the cost of renting a house is increasing, workers are almost unable to save enough to buy a house today”. Sharing the same opinion, Mr. Nguyen Van Ba ​​- Vice Chairman of the Nghe An Province Real Estate Association frankly said: “With the current housing price and income level, if the State does not have a breakthrough solution to limit group interests, it will be very difficult for workers, workers in industrial parks, factories, and young families to realize their dream of settling down”.

(To be continued)