‘Hot’ home prices in Vietnam do not reflect market reality: official

Sky-high housing prices in Vietnam’s major cities do not reflect the actual state of the real estate market, said Deputy Minister of Construction Nguyen Viet Hung.

Addressing a regular government press meeting on Monday, Hung said the recent sharp increase in housing prices, particularly in major cities, has been caused primarily by demand far exceeding supply and manipulative tactics used to inflate property values. Rising input costs have also contributed to higher home prices.

Hung stressed that there are several laws aimed at preventing those who manipulate the real estate market and inflate prices.

He also mentioned several recommendations that the Ministry of Construction has made to the government for curbing speculation and stabilizing the property market.

Notably, the ministry has proposed taxes on second and additional properties to curb speculation and discourage short-term buying and selling for profit.

It has also recommended establishing a state-managed center for real estate transactions and land use rights to prevent collusion between real estate trading platforms and brokers that could disrupt the market.

Late last month, Deputy Finance Minister Nguyen Duc Chi had noted that taxing second properties and beyond was a practical measure that can curb speculation and cool housing prices, but stressed that it would not be sufficient on its own.

"A tax policy alone cannot fully address the issue. Other policies, such as those related to land use and urban planning, should also be aligned (with the measure)", he added.

Data compiled by real estate website Batdongsan.com.vn shows that as of June this year, average real estate selling prices in Vietnam had increased by 24% from the beginning of 2023.

According to the Vietnam Association of Realtors (VARS), 27,335 primary property products entered the market in the second quarter of this year, 50% of which featured apartments. Of this segment, 60% were high-end apartments with prices of over VND50 million ($1,983) per square meter. Mid-end and affordable apartments accounted for just 14% and 7% of the supply, respectively.