Knight Frank's report predicts that by 2025, Vietnam will have 511 people with assets over 30 million USD and 25,812 people with assets over 1 million USD. Is this an excuse to show the money or is it just a PR stunt? Let's dissect.
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Expensive apartment nearly 1 billion VND/m2
Recently project One Central Saigon (located in District 1, Ho Chi Minh City) caused a stir in the real estate market when it offered a record-high expected selling price, about $25,000-30,000/m2, equivalent to VND650-800 million/m2. Thus, on average, buyers will have to spend about 45 billion VND (equivalent to nearly 2 million USD) for an apartment of about 60m2 including 1 bedroom. This price includes VAT and maintenance costs.
This is not the first time that apartments with "shocking" prices have appeared in Ho Chi Minh City. Recently, apartments with prices of several hundred million dong/m2 have continuously appeared in many districts in Ho Chi Minh City.
Previously, the super luxury real estate dealers in Ho Chi Minh City were excited about the appearance of the apartment project Grand Marina located on Ton Duc Thang street, announced the successful transaction price of 18,000 USD/m2 (equivalent to 423 million VND/m2). With this price, the apartments range from 18 to 24 billion VND / unit depending on the area from 40 - 110 m2.
In 2021, capital inflow into real estate is quite abundant due to the decrease in bank loan interest, the sublimation of the stock market and the spread to real estate; The epidemic has also made individual investors see real estate as a safe haven... These are all factors that make real estate prices in general, not just the apartment channel, continuously increase. However, the advice of experts all note, people with real needs to live need to find affordable projects, instead of running after glossy ads.
Not as flourishing as Ho Chi Minh City, but in Hanoi market, there are also some super luxury projects. Recently, a project in the golden land of Hanoi, with 2 facades, at a busy intersection, is offered for sale at a price of 24 to 40 billion VND/apartment with high-class furniture. Apartments overlooking Hang Bai and Ly Thuong Kiet streets are the most expensive, priced from 260-290 million VND/m2. The apartment with the largest area is 147m2 with a selling price of over 42.6 billion VND.
If a few years ago, the supply of luxury apartments only accounted for 1%-2% of the whole market, now it accounts for more than 20%. According to CBRE Vietnam's residential real estate market report in Ho Chi Minh City, in the first quarter of 2021, the mid-end segment tends to cool down, accounting for only 41% of the supply compared to 55%-60% in previous years. Meanwhile, the luxury apartment segment has the second largest basket of goods in the market, accounting for 39% of the total supply. The high-end segment accounted for 20% and no affordable apartment projects were offered for sale. If the supply of high-end and luxury apartments is included, these two types of expensive houses account for 59% of the basket, leading the whole market.
Mr. Nguyen Duy Minh, a real estate expert, warned that the supply of luxury apartments is growing hot, accounting for too high a rate (39%) that needs to be considered. The rate of luxury apartments should only account for 1%-2% of the total supply, which is a safe and reasonable level.
Pacific Place was once recognized as one of the most luxurious apartment complexes in Hanoi. The price of the apartment is about 100 million VND/m2. The rental price for apartments here is also over 1,000 USD/month. This is also one of the apartments with the highest service prices in Hanoi. However, the residents themselves are also disappointed by the luxury apartments but the swimming pool is too small and many items have changed compared to when the house was advertised for sale.
Another super luxury apartment on Thuy Khue Street (Hanoi) also sells for up to 4,000 USD/m2. Currently, however, residents are having to contend with the owner regarding a series of disputes over maintenance fees.
Mr. Le Hoang Chau - Chairman of Ho Chi Minh City Real Estate Association (HoREA), the fact that investors are racing to offer projects with "heavenly" selling prices is not a favorable reaction for the market because of the current situation. The more aggressive the price stimulus, the more widespread the effect will be.
According to Mr. Chau, the time to open and sell apartments formed in the future under the label of high-class apartments, luxury apartments, and super-luxury apartments is a period when home buyers are easily deceived, easily bought the wrong product. Product is not as advertised.
Knight Frank's report predicts that by 2025, Vietnam will have 511 people with assets over 30 million USD and 25,812 people with assets over 1 million USD. The market and demand for the super-luxury real estate segment is there, but "expensive" is also due to the actual experience of customers, not determined by the advertising and marketing words of the investor. .