According to a newly released market report by Savills Vietnam, in the first 9 months of 2024, the apartment market in Hanoi recorded more than 12,000 new units launched. In the third quarter, there were 5,265 new apartments provided, a sharp increase of 95% quarter-on-quarter and 178% year-on-year.
House prices for sale in Hanoi continue to rise.
However, primary supply was still down 47% year-on-year. Despite the limited primary supply, the number of apartments sold reached 6,840 units in Q3, up 35% quarter-on-quarter and 226% year-on-year. The total number of apartments sold in the first 9 months of 2024 reached 17,000 units. In fact, this number is only lower than the level in 2019, and higher than in 2020 - when the market began to be affected by the Covid-19 pandemic.
The majority of new supply remains in the Grade B segment, concentrated in large projects in the East and West of Hanoi. Nam Tu Liem and Cau Giay accounted for 63% of primary supply and 78% of transactions in the quarter. 92% of the supply in the West is Grade B apartments. The West will supply 21,000 apartments from 28 projects, equivalent to 17% of future supply.
Regarding prices, Ms. Do Thi Thu Hang, Senior Director, Research and Consulting, Savills Hanoi, said that house prices for sale in Hanoi are still on the rise. The primary selling price is currently at VND69 million/m2, up 6% compared to the previous quarter and 28% compared to the same period last year.
Performance of Hanoi apartment segment. (Source: Savills).
In the secondary market, the average apartment price in Q3 was VND51 million/m², up 10% quarter-on-quarter and 41% year-on-year. The average secondary price has increased by 17% per year since 2020, with Grade C increasing the most at 20%/year, followed by Grade A at 16%/year and Grade B at 15%/year. Many buyers are shifting from the primary to the secondary market because this market has more choices, as well as more secure legal issues.
In this context, Savills experts assessed: “Although the market is growing, the gap between household income and house prices is becoming increasingly obvious. With the average income of a household in Hanoi being about 250 million VND/year, the average price of an apartment is about 4 billion VND, people need up to 18 years of saving without spending to be able to buy a house. Average income only grows by 6% per year, house prices on the secondary market have increased by an average of 17-20%, causing many difficulties in buying a house”.
Entering Q4 2024, the market is expected to welcome 9,700 new apartments, of which 88% will come from the next phases of large projects. From 2025 onwards, about 110,000 units from 106 projects will be launched. Grade B will continue to lead with 54% of future supply. Dong Anh, Hoai Duc, Gia Lam and Hoang Mai will contribute 62% of the market share.
Ms. Hang added: "The resolution of legal problems is gradually improving, opening up opportunities for new projects to be implemented. However, this process will take place slowly and it is difficult to immediately meet the diverse demand for products in the market. The trio of Land Law, Real Estate Business Law and Housing Law, which are being applied early, along with the guiding documents that have been gradually announced, will continue to bring positive impacts to the market, but this process will not happen quickly."
Previously, at the workshop “Identifying opportunities and challenges of the Vietnamese real estate market in the new era” held in early September, the Director of Nha Ho Ngay Viet Nam commented that the escalation of apartment prices reflects two key factors: the scarcity of supply and the increasing demand of buyers. New projects launched on the market are almost all in the high-end segment, with the primary price constantly increasing, which further increases the price of transferred apartments.
Ms. Mai also warned that without drastic measures from the government and businesses to increase supply, especially in the social housing and low-cost housing segments, the market will face serious consequences. People with real housing needs will have difficulty owning a home, and the "price fever" could lead to instability for the entire real estate market.
Le Trang
Source: https://www.congluan.vn/chenh-lech-giua-thu-nhap-ho-gia-dinh-va-gia-nha-o-tai-ha-noi-dang-ngay-cang-ro-ret-post315999.html
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