Buy an apartment because of FOMO
From the beginning of the year until now, the Hanoi apartment market has recorded an unprecedented price increase. According to CBRE, in Hanoi, most new supply continues to be in the high-end segment, pushing up primary selling prices of Hanoi apartments. The average primary selling price in Hanoi currently reaches 56 million VND/m2 (excluding VAT and maintenance costs), an increase of 5% quarter-on-quarter and 19% year-on-year.
In particular, the selling price in the secondary market of Hanoi apartments in the first quarter recorded the highest annual price increase ever, up 17% over the same period last year and reaching an average of more than 36 million VND/m2. . Strong growth was recorded in almost all districts in Hanoi and concentrated in the western districts where supply is abundant and the population is dense.
In the face of galloping price increases, many people want to buy apartments like “sitting on a fire”. This causes the proportion of customers who make transactions immediately after learning to increase significantly compared to 2023 because of the “fear of price increase” mentality. The situation where customers have to make quick transaction decisions is becoming more common.
The “fear of price increase” mentality has appeared because since the beginning of the year, apartment prices in Hanoi have increased sharply. This market is having small fevers, prices change daily, the day before and the next day when placing a deposit the price has changed.
This situation was also shared by Ms. Do Thu Hang, Senior Director, Savills Hanoi Research and Consulting Department at the market press conference for the first quarter of 2024. Ms. Hang said that there has never been a time when buyers have gone to see houses and closed their purchases as quickly as this time. In the past, buyers often researched and considered for a long time before deciding to spend money because this was a highly valuable asset. Recently, more and more people are closing their purchases quickly, “just go see and pay a deposit in the same day”.
In addition to the reason of pent-up demand while limited supply, Ms. Hang believes that many people are rushing to buy apartments right now because they are afraid that prices will continue to escalate and will no longer be at a reasonable level, also known as FOMO psychology.
The reason buyers are concerned and want to close their house purchases early is because apartment prices in Hanoi continued to escalate early this year, on both the primary and secondary markets. Savills said new apartment prices have reached an average of 59 million VND per square meter, up 14% year-on-year.
Brokers “play” psychological tricks
Grasping the psychology of home buyers, many brokers “play” psychological tricks, such as “buy quickly without price increase”, “few customers are satisfied”, “this house will be gone by early this afternoon”.. The buyer must quickly pay the deposit.
Realtors take customers to see houses in the evening. (Photo: LP)
Ms. Hang (38 years old, Hanoi) shares the story of looking to buy a house over the past month. Ms. Hang said that her family is looking to buy apartments in 2 projects that have been handed over and put into use around ring area 3. For each project, Ms. Hang works with a different broker. Specifically, for project 1, the broker reported that Ms. Hang had 2 apartments, one for 7.4 billion VND and one for 7.8 billion VND. Project 2, another broker reported having 1 apartment worth 7.2 billion VND.
“Nothing happened until two other brokers appeared. A broker named Quynh texted me his name and another broker named Ha was found by my father,” Ms. Hang shared.
A broker named Quynh informed Ms. Hang that there are 3 apartments in two projects that she is interested in. All three apartments that broker Quynh reported had the same number of floors and photos of each apartment as the first two brokers she worked for.
“Broker Quynh reported at 9:00 a.m., then at 5:00 p.m. the same day reported that the 7.8 billion VND apartment had been closed. At 9:00 p.m. the same day, the broker continued to report that the 7.2 billion VND apartment had been closed. At 8 a.m. the next day, broker Quynh continued to report that the 7.4 billion VND apartment had already been closed,” Ms. Hang said.
According to broker Quynh, all the apartments sold very quickly, there were no apartments left in the apartment fund, and sales were extremely small.
However, with the 2 projects with 3 apartments that Ms. Hang is interested in, she was able to accurately check that the apartments were still intact, even listing them for nearly 2 months without being able to sell them. “No one has bought all 3 houses, but there is no closing as fast as the wind like the broker told me. Buying a house is like buying a bunch of vegetables, only a few hours later and someone has decided to buy it,” Ms. Hang shared.
Ms. Hang also encountered a similar situation with a broker named Ha. This broker introduced her to 2 apartments in another project. She and her father and children went to see and quite liked the two apartments in this broker’s apartment fund, but the prices were high and based on the wall, so she didn’t buy them anymore.
“After viewing, Ha said that the owner of the two houses I liked yesterday had already accepted the deposit. After 3 days, this broker said that because the taxes and fees could not be negotiated on those two apartments, the deposit was canceled, urging my family to decide quickly without increasing the price, and then someone bought it,” Ms. Hang shared.
Mr. Tran Lam – apartment broker at a famous floor in Hanoi shared that Ms. Hang’s case is not rare but is a common situation of many people looking to buy a house. At all times, brokers create the psychology for buyers to buy quickly and close quickly otherwise the price will increase and others will buy it. However, not everyone has experience and checks authentic information like Ms. Hang, especially young people buying for the first time. If I heard the broker say that, I would panic and lose my money. So this basic lesson is still regularly applied by uncaring brokers.
At this time, home buyers need to be careful
Faced with escalating price developments, some projects have had their prices pushed beyond their actual value, Ms. Do Thu Hang, Senior Director of Consulting and Research, Savills Hanoi, said that buyers need to Review carefully, consider the use value and reasonableness of the project.
“In general, if prices continue to increase, buyers will consider their financial problems. While real housing demand still accounts for the main proportion, if prices continue to rise, buyers can consider and choose The option of renting an apartment in the inner city, or accepting to shift demand to supply in provinces neighboring Hanoi at reasonable prices,” Ms. Hang said.
Ms. Do Thu Hang, Senior Director of Consulting and Research, Savills Hanoi
Advice for real home buyers is to choose supply sources in neighboring localities such as Hung Yen or Bac Ninh, belt 4 or ring 3.5 thanks to infrastructure development. Infrastructure development will pull suburban areas “closer” to the city center, reducing travel time.
“In neighboring provinces or suburban areas, investors can access land at lower costs, creating a more affordable housing supply,” Ms. Hang shared.
In addition, products in neighboring provinces will increasingly meet Hanoi’s housing needs. Hung Yen and Bac Ninh will provide about 203,000 apartments from 2024 to 2026.
“The revised laws are expected to create conditions for the real estate market to develop and bring certain improvements to supply. From 2025 onwards, the market will have about 84,400 apartments from 101 projects. is open for sale,” she said.
