New apartment prices rise, but resale prices down

High-end apartments accounted for nearly 78 percent of new supply in the second quarter, pushing the average price tag up from the first quarter, according to data from consultancy DKRA Vietnam.

Another consultancy, CBRE Vietnam, said prices had risen by 8.6 percent to US$2,455 a square meter.

Real estate platform Batdongsan attributed the rise to higher construction costs.

Apartments with price tags of under VND40 million ($1,710) have gone extinct, it noted.

However, it was a different story on the secondary market, with both sales and prices falling.

A VnExpress survey found that prices of apartments resold in Thu Duc City and nearby localities had dropped by 5-10 percent, as investors tried to get rid of their loan burden.

Many sold at cost price and even losses of up to 10 percent due to a cash crunch, the director of a real estate company in Thu Duc City said.

Demand also fell, and prices could drop further as banks tighten lending to property developers and buyers, he added.

Vo Hong Thang, head of research and development at DKRA Vietnam, said rising inflation and interest rates are the two main reasons for the slump.

Deputy director of CBRE Vietnam, Pham Ngoc Thien Thanh, also pointed to the long-drawn approval process and supply-demand mismatch as challenges facing the market.