Housing prices fall as moving to suburbs no longer trendy

May 12, 2023 - 16:28
Thu is selling both the land slot and the house for VNĐ2 billion, about VNĐ900 million lower than the initial outlay, but no deal has been reached for the past month. 


Suburb land plots in Vĩnh Phúc Province. The reversal of the "moving to the suburbs" trend has pushed down real estate prices in the outskirts. VNA/VNS Photo

HÀ NỘI — As the pandemic-induced trend of "moving to the suburbs" is dying off, homeowners are rushing to liquidate their real estate in the outskirts to cut losses.

The trend started in 2021 as the pandemic has made people become more health-conscious. Well-off families were willing to spend billions of VNĐ on a house away from the city centre to enjoy a healthy outdoor life.  

The growing demand for suburban housing has attracted scores of flippers aiming to get in on the ground floor and then make a quick resale to gain profits. However, their strategy worked for a while but no longer because of the downturn in the realty sector.

Mr. Khang, a real estate agent in Hòa Bình Province, said the demand for suburban housing was at its peak between 2020-2021, during which he sold nearly 10 houses monthly.

The situation began to change in mid-2022 as living away from the city was no longer appealing to homebuyers. The weakening demand left flippers with no choice but to slash prices to quickly move out of the unprofitable sector.

"Houses in suburbs sell poorly now as the market has come to a standstill. Certain houses take me more than four months to sell," said Khang.  

Mrs. Thu living in Hà Nội spent VNĐ2 billion (US$85,219) on a land plot in Hòa Bình Province in 2021 to build a house for weekend getaways. The house came into use later that year with a construction cost of VNĐ900 million.

She initially visited the house once per week but later with far less frequency because of losing interest. Fewer and fewer visits have gradually pushed the house into disuse.

"I visited the house once since late 2022. It is going to pot, so I've put it up for sale to recoup its costs," said Thu.

Thu is selling both the land and the house for VNĐ2 billion, about VNĐ900 million lower than the initial outlay, but no deal has been reached for the past month. 

Another homeowner said he paid VNĐ2.3 billion to buy a land plot in Ba Vì District and an additional VNĐ1 billion to build a house on the land in 2020. 

As the house hasn't been used since its inauguration, its condition is deteriorating quickly. He has wasted no time in selling both the house and the land for VNĐ2.2 billion before housing prices could fall further. 

"I have gone so far as to accept a loss margin of 30 per cent to liquidate the real estate," said the homeowner.

With a loss margin of 30 per cent, his situation was better than most homeowners in the same district. For instance, land plots in Yên Bài Commune are selling for about VNĐ2.5 million per sqm, against VNĐ4.5 million per sqm last year.

In Tản Lĩnh and Ba Trại Communes, real estate prices fell from about VNĐ4 million per sqm to VNĐ2 million per sqm.

"Prices are falling because the trend of moving to the suburbs is over," said a real estate agent. —VNS