HANOI’S HIGH-END PROPERTY EXPERIENCES CONTINUOUS CLIMB

Prices of apartments are rapidly increasing every month in the capital, with more high-end offerings costing as much as $8,000 per square metre being launched on the market.

The price increase in Hanoi’s apartment market continues, while liquidity is still strong. “As a project opens for sale, buyers have to confirm within hours to avoid missing out,” said real estate broker Tran The Anh.

Some projects opened for sale in recent months have been filled on launch day, with only some large-area apartments left on ground or upper floors.

Private funding expert Tai Tran said other investment channels are struggling with numerous challenges. “The interest rate is too small to mobilise capital, and gold is managed so no-one can buy SJC, while it is challenging to earn from securities now. So real estate is a good channel and developers are accelerating the process to build and launch new projects at higher prices,” Tran said.

Specifically, middle-end projects like Wisteria, Masteri West Heights, and Sola Park have been offered at around $2,400-3,000 per sq.m, while Lumi Hanoi, Victoria, and QMS To Huu are set at about $2,800-3,600. They are not located in the central business districts, but instead about 10-15km from the core area of the capital, where selling prices in the past were typically about $1,000-2,000.

Meanwhile, some projects in the central areas of Hanoi like Soho Heritage Westlake, The Gloria in Dong Da district, Diamond BRG in Thanh Xuan district, and The Matrix One in My Dinh are being offered at $4,000-6,000 per sq.m. Some ventures in Tay Ho district like Skyline Westlake and Noble Crystal Sunshine are rumoured at a sale price of $7,200-8,800 per sq.m.

Even older apartment buildings have reported a sharp increase of 30-40 per cent in secondary sales compared to the same period last year.

“The Ministry of Construction sees that apartment prices raised by an average of 5-6.5 per cent in the second quarter of 2024 (compared to the first quarter), and 25-30 per cent on year, depending on their location and quality. In particular, the increasing prices are not only in newly opened projects but also in old apartments that have been used for many years,” said Hoang Hai, director general of the Agency for Management of Housing and Real Estate Market. “Apartment prices may continue to increase due to the scarcity of new supply on the market.”

CBRE experts believe that apartment prices in Hanoi in the second quarter rose to the highest in the past four years and are almost approaching those in Ho Chi Minh City, with about 5-10 per cent in price difference now, while the price difference between the two was about 30 per cent before the 2020 pandemic.

Nguyen Hoai An, senior director and head of CBRE’s Hanoi branch, explained the reason for high apartment prices, mentioning that the high-end segment accounts for the majority of supply, along with the presence of some southern investors and foreign developers in the Hanoi market.

“Moreover, the number of released-for-sale apartments reduced to about 15,000-20,000 units in the past two years from 30,000-40,000 units per year in 2019-2020. The demand for housing is constantly soaring, while the supply is declining, so new apartment prices have been escalating,” An said.

Hoai An predicted that Hanoi apartment prices will continue climbing until 2026. “By then, the increase in Hanoi apartment prices will stabilise, when a new price level has been fixed,” she said.

Property distributor One Housing reported the primary apartment market with prices under $2,000 was empty, with the supply of new projects limited. It forecasts the total supply in 2024 in the Hanoi market to be about 22,000 units, while the capital welcomes 160,000 more people each year, according to the Hanoi Population Department.

“Moreover, Vietnam has the fastest-growing middle class in the world, with a large demand for homeownership in the middle and high-end segments. Developers are building projects to meet the segments, and the prices of apartments are also pushed up,” a representative of One Housing said. “Customer behaviour in choosing a place to live has changed, apartments are preferred instead of land as previously.”

The representative added that it was challenging to wait for the decrease in apartment prices, especially after new land-related laws were put into effect in August. In 2026 and 2027, the supply may rise, but cheap apartments will be very far from central business districts like Thanh Tri, and Phu Xuyen districts, while no factors look likely to cause apartment prices to decrease next year.

Source: VIR