In the recent “fever” of apartments in Hanoi, the number of apartments without red books has also increased sharply. Many people accept the risk of paying for apartments without red books to meet the need for a stable home.
The Hanoi apartment market has experienced an unprecedented “wave” of price increases. At times, the price of used apartments fluctuated daily.
According to data from Batdongsan.com.vn, since December 2023, searches for apartments have increased again, and by March this year, they had reached the peak of August 2023. However, in April, the level of interest in Hanoi apartments decreased by 23% compared to the previous month.
Although interest has decreased, the selling price of apartments in Hanoi shows no signs of decreasing. In April, the affordable apartment segment (under 30 million VND/m2) increased by 12% compared to the previous month. Mid-range apartments (30-50 million VND/m2) also increased by 5% and high-end apartments (over 50 million VND/m2) increased by 3%.
In addition, apartments without red books, collective houses, and residential land are also increasing in price. Mr. Nguyen Tien (Thanh Xuan, Hanoi) has an apartment without a red book in Hoang Mai with an area of 84 square meters including 2 bedrooms and 2 bathrooms, which is being sold for 2.9 billion VND.
It is known that Mr. Tien bought this apartment from the investor in 2019 for 1.7 billion VND. By last May, Mr. Tien had paid 95% of the apartment value to the investor. Thus, compared to the time of purchase from the investor, Mr. Tien is now selling for an increase of 1.2 billion VND.
Mr. Tien said: “Because I need money urgently, I decided to sell. Currently, the selling price I offer is the cheapest on the market. With a location in the center of Hoang Mai district, the supply is limited, so it is difficult for customers to find a project with a reasonable price like the apartment I am selling.”
The owner of this apartment shared that the residents have now settled down in a fairly large and stable population. As for the legal issue of not having pink books for residents, it is because the investor is facing some internal difficulties. The investor also promised the residents that they will soon issue the books.
That’s why, Mr. Tien said, customers came to look at him. “Many customers with good intentions wanted to buy and negotiated a discount of 50-100 million VND for them. However, I’m considering it,” Mr. Tien said.
Similarly, Mr. Pham Long (Bac Ninh) shared that in 2018, his parents bought him a 56m2 apartment at HH Linh Dam apartment building (Hoang Mai, Hanoi) for more than 1.1 billion VND. Last February, he sold this apartment for 1.5 billion VND, a difference of 400 million VND compared to the time he paid.
According to Mr. Long, the HH Linh Dam apartment complex was handed over to residents in 2016, but due to many violations that were not corrected by the investor, the red books of the apartments have been suspended for many years. However, the transactions of buying and selling apartments here are still taking place normally.
In fact, there are quite a few apartment buildings that have been put into operation but do not have pink books. Apartments in these buildings are still being traded and buyers are willing to buy without a red book. In terms of price, these apartments without a red book will be cheaper than apartments with red books in the same area. Therefore, many people accept the risk of spending money to buy with the desire to settle down.
Accordingly, the biggest risk is that the State will not recognize the legal ownership of the apartment and the right to use the land attached to that apartment project. Therefore, when disputes arise related to this property, the Law will not protect it. In addition, during the time without the red book, the buyer cannot borrow money from the bank by mortgaging the apartment.
According to Mr. Nguyen Van Dinh, Vice President of Vietnam Real Estate Association (VNREA) – President of Vietnam Real Estate Brokers Association (VARS), the supply of apartments is decreasing, especially in the affordable segment. In addition, input costs such as construction materials, capital costs, labor, etc. are increasing, leading to an increase in new home prices.
“Not only new apartments, but also used apartments have increased in price recently. However, in reality, buying an apartment without a red book/pink book can cause many risks for the buyer. Therefore, before paying, home buyers need to carefully consider legal factors,” said Mr. Dinh.
With the apartment market cooling down, many buyers and investors are wondering whether they should spend money to buy an apartment at this time. Mr. Nguyen Quoc Anh – Deputy General Director of Batdongsan.com.vn said that consumers should clearly define their purpose. If they buy to live, they can make a transaction when their finances allow to immediately meet the practical needs of settling down.
“Waiting for apartment prices to drop sharply is very difficult, because supply cannot improve quickly. When the revised Law on Real Estate Business comes into effect, the number of investors meeting the requirements to implement projects will decrease. Meanwhile, the need to own a house is always present, especially in large cities,” Mr. Nguyen Quoc Anh shared.
However, in the case of buying for investment, buyers should consider carefully – Mr. Quoc Anh added. If investing in the short term, you should not rush to put money down because the price and level of interest in apartments at this stage are not stable, when needing quick liquidity, investors will encounter difficulties. But if investing in the long term and investing for the purpose of renting to get cash flow, apartments are still a type that can be considered.