Rising housing prices, risk of real estate "bubble" reoccurring?

The price increase of many housing projects has made many people worry about the possibility of another real estate "fever".

Since the beginning of the year, the Hanoi real estate market has had many successful launches of mid- and high-end apartment projects, such as Goldmark City (Bac Tu Liem), FLC Complex (Nam Tu Liem); Hong Kong Tower (Dong Da), Five Star Garden complex (Thanh Xuan), Park 3 building in Vinhomes Times City (Hai Ba Trung), etc.

The common price in this segment ranges from 22-28 million VND/m2, some projects are up to 35-40 million VND/m2 but are still in high demand. After considering the price, Ms. Le Thi Huong Giang decided to put down a deposit to buy an apartment of about 70 m2 for about 2.5 billion VND at Park 3 building in Vinhomes Times City urban area.

House prices are showing signs of increasing again (illustrative photo: KT)

According to the Ministry of Construction, the real estate market in the first three months of 2015 continued to recover positively with the number of successful transactions three times higher than the same period last year. In March alone, in Hanoi, there were about 1,500 successful transactions, an increase of 25% compared to the previous month.

According to the Foreign Investment Agency, Ministry of Planning and Investment, the real estate business sector ranked second in attracting foreign investment in the first quarter of this year, with newly registered investment capital increasing by nearly 203 million USD. According to CBRE Vietnam Co., Ltd., the number of high-end housing projects opened for sale in the first quarter of this year was higher than any other quarter during the period from 2012 to 2014.

Mr. Vu Cuong Quyet, General Director of Dat Xanh Mien Bac Joint Stock Company, commented that in recent years, the real estate market has mainly focused on low-cost commercial housing projects and social housing, with the absence of mid- and high-end apartments. The rapid increase in supply in this segment shows that investors have made a strong shift. The mid- and high-end segment will have better liquidity and will have much brighter spots than in previous years. Investors have returned to this segment.

However, it is worth mentioning that there has been a clear increase in prices in many projects in all housing segments, with increases ranging from 3-10%. This move has not only occurred in the secondary market but has also been adjusted by investors. The reason is that due to the high demand for buying houses, investors have focused on improving service quality, environmental landscape, accompanying utilities and ensuring construction progress... These are also factors that home buyers are interested in today.

Mr. Nguyen The Diep, Vice President of the Vietnam - Germany Real Estate Club in Hanoi, said that the real estate market has signs of recovery but there is still an inventory of about 70,700 billion VND. The demand for home buyers in all segments is very large, but it is concentrated in projects with favorable locations, of which there are not many. The phenomenon of continuous and simultaneous price increases in many real estate projects can lead to a "bubble" situation if there are no comprehensive solutions to control it.

Mr. Diep warned: Prices can be inflated, not true to the real price, which is very dangerous, causing loss of consumer confidence, and can cause loss of liquidity in a certain segment or the entire real estate market./.

According to VOV.VN