Page 29 - VET353

BUSINESS REPORT
PR OPERT Y

Short of requirements

Positive changes can be found in Hanoi’s real estate
market but a lack of supply remains a pressing issue.

By PHAN NAM

ews that a number of apartment only 3 per cent had selling prices of less which has continually seen new price levels
projects in the western reaches of than VND2 billion ($81,600). established that are far beyond the means
N Hanoi were being sold at an average In the low-rise segment, the number of most people with actual housing demand.
price of VND80-100 million ($3,260-4,080) of high-priced houses accounted for the Its figures indicate that the proportion of
per sq m caused something of a stir in the majority of inventory and significantly affordable apartments, where demand is
capital’s real estate market, as this was pushed up primary prices compared to 70 per cent of the total, fell from 30 per
double the price of previous products that the third quarter of 2023. Primary villas cent in 2019 to just 7 per cent in 2022 and
are similar in terms of location, quality, rose in price by 55 per cent quarter-on- then 6 per cent in 2023.
and services. This was also quite high for quarter to VND160 million ($6,530) per “Though many mechanisms and policies
products outside of inner-city areas. Many sq m of land. Prices of both semi-attached have been issued to stimulate the market,
expressed concern that Hanoi was estab- houses and shophouses jumped 3 per cent in reality, apartment prices are unlikely to
lishing a new pricing benchmark. to VND194 million ($7,920) and VND328 decline because projects are primarily found
million ($13,385) per sq m of land. in central districts, where land funds are
Limited supply Figures from sales platform One Mount becoming increasingly limited, so real estate
Many factors lie behind rising average Real Estate show that selling prices of primary investors focus on the high-end segment
primary selling prices, including limited apartments in Hanoi rose 16.3 per cent in to maximize profits,” said VARS Chairman
supply of new projects amid growing 2023 compared to 2022 in all three segments. Nguyen Van Dinh. “Related costs such as
demand among residents. Housing prices The high-end segment, where prices range financial expenses, construction materials,
in the apartment segment are forecast to from VND50-80 million ($2,040-3,265) per and wages also continually head upwards,
continue rising as a result of higher land sq m, increased by 9.5 per cent. forcing developers to sell products at higher
and construction costs, better infrastructure, According to a representative from One prices to earn a profit. There are very few
and overall improvements in quality. Mount Real Estate, selling prices main- projects in the core central area that are
According to real estate consultants tained an upwards trajectory because the being built or newly licensed, due to extended
Savills, Hanoi’s housing market saw the segment accounted for the majority of legal procedures, while housing demand
smallest new supply for a decade in the new supply, at over 90 per cent. Some remains high and is growing. Businesses
fourth quarter of 2023, in both the low- property developers have also increased with projects on sale at this time hold the
rise and apartment segments. their prices and offered additional apart- advantage in determining prices.”
In apartments, primary supply was ments for sale on higher floors.
11,911 units, down 40 per cent quarter-on- This shows that it can be more difficult
quarter and 41 per cent year-on-year, while for buyers to secure houses amid rising
the low-rise segment saw new supply of demand. With new supply limited and In 2024, Hanoi’s primary apartment
272 units, down 82 per cent year-on-year. focusing on the high-end segment, afford- market is expected to see supply of an
Prices in both segments were anchored ability becomes a key concern. additional 17,000 new units, mostly in
at high levels. Apartments accounting for the west and the east of the city.
63 per cent of new supply were priced Setting records Despite the positive signs, the economy
from VND51-70 million ($2,000-2,855) Data from the Vietnam Association of and the real estate market need more
per sq m, an increase of 24 per cent year- Realtors (VARS) shows that the increasingly time to recover to levels prior to the
on-year. Those priced from VND2 to 4 severe imbalance between supply and Covid-19 pandemic.
billion ($81,600-163,260) accounted for demand has pushed up housing prices, Source: One Mount Real Estate
55 per cent of the market share, while particularly in the apartment segment,

44 Vietnam Economic Times April 2024 en.vneconomy.vn