Supply in the hands of big names
The apartment market in 2024 - early 2025 recorded signs of improvement in total supply compared to previous years. However, most of the current supply is still focused on high-end and luxury projects.
According to the survey, the new projects are mainly located in Co Loa (Dong Anh), Tay Mo (Nam Tu Liem), Tay Ho Tay Urban Area (Tay Ho)... with the participation of CapitaLand Development, Taseco Land, Sunshine, MIK, Masterise... Apartment prices range from 70 million to 200 million VND/m2, depending on the segment.
Meanwhile, mid-range and affordable apartments are almost absent. Even suburban areas such as Gia Lam, Hoai Duc, Dong Anh have recorded prices exceeding 70 million VND/m2. The phase difference in product structure has caused the price level to be pushed up too high, beyond the affordability of the majority of people.
The cluster supply, focusing on some large urban areas and being in the hands of large enterprises not only pushes up prices but also causes the market to lack products to meet real housing needs. This is a big challenge in balancing supply and demand and expanding access to housing.
The market is dominated by a number of large enterprises
According to experts, when supply is mostly in the hands of a few businesses, price competitiveness is almost gone. Instead of competing to reduce prices or diversify products, investors tend to price high from the beginning to maximize profits.
Mr. Nguyen Anh Tuan - Chairman of the Board of Directors and General Director of Phuong Dong Group - commented that the situation of supply concentrated in some large enterprises is not new, but the period of 2022-2024 is even more clearly marked due to legal problems that have caused many projects to stall, while large urban areas are implemented according to special mechanisms. Supply therefore fell into the hands of a small group of businesses, causing market imbalance.
When supply is concentrated, investors can easily price based on expectations of profits rather than real value. In places where there are few projects open for sale, prices can be pushed up without competitive pressure" - Mr. Tuan emphasized.
Mr. Tuan also said that in Dong Anh, new apartment prices have increased sharply, pushing up the price level of neighboring areas, even though the real value has not changed. Many investors are still accepting this price because they expect further price increases.
There needs to be a mechanism to monitor prices of projects
Regarding solutions, Mr. Nguyen Anh Tuan said that it is necessary to promote the development of social housing, resettlement and renovation of old apartments to increase supply and diversify the market, meeting the real needs of low- and middle-income people.
When diverse supply and projects are implemented on schedule, the monopoly on prices will gradually be eliminated. Housing prices will reflect closer to real value, creating opportunities to own a house at a reasonable price" - Mr. Tuan commented.
He said that in Hanoi, not only Dong Anh, Co Loa or Tay Ho, but also suburban projects have recorded a sharp increase in prices. Some investors have also established their own price policies, pushing prices up to 200 million VND/m2. This shows that the market is operating in the direction of maximizing profits instead of sticking close to the real value of real estate.
In terms of economy, when supply is too concentrated in a small group of businesses, their valuation power becomes huge. This creates a market lacking healthy competition and pushing selling prices higher than the real value" - Mr. Tuan analyzed.
