According to Savills' report, in the second quarter of 2023, the Hanoi real estate market recorded many positive signals, especially in the apartment, villa and townhouse segment.
For the apartment segment, new supply will mainly come from existing projects, with 3,596 apartments in Q2/2023, up 76% QoQ and 125% YoY. Primary supply will consist of 20,412 apartments, of which Class B accounts for 91% of the market share.
Apartment transactions fell 6% QoQ but increased 11% YoY. The average absorption rate of newly launched projects was 28%.
Primary apartment prices have increased for 18 consecutive quarters and are 73% higher than in the first quarter of 2019. This is due to rising land prices and construction costs, infrastructure development and quality improvements.
Primary apartment prices have increased for 18 consecutive quarters and are 73% higher than in the first quarter of 2019. (Photo: OD)
Meanwhile, long-term housing demand remains high due to positive net migration, population growth and high urbanization rates.
Regarding the recovery of the apartment market, Ms. Do Thi Thu Hang, Senior Director, Consulting and Research Department, Savills Hanoi, assessed: “The quiet market situation will continue until deposit interest rates decrease and new supply enters. The Government is actively adjusting monetary and fiscal policies.”
For villas/townhouses, the number of transactions per quarter also improved. In Q2/2023, there were no new projects in the quarter, supply came from two existing projects, up 334% quarter-on-quarter but down 14% year-on-year.
Quarterly transactions improved, with 106 units sold, up 20% despite a 65% year-on-year decrease.
According to Savills, the newly-constructed Ring Road 4 is expected to spur development in suburban areas and neighboring provinces such as Hung Yen and Bac Ninh. When Ring Road 4 opens to traffic in 2027, housing supply in these areas is expected to increase by 36% compared to the present. This will ease pressure on the inner city with increasingly limited land funds.
Regarding the future of the villa/townhouse market, Mr. Matthew Powell, Director of Savills Hanoi, commented: “We expect the recovery to continue to be driven by the Government’s policies and efforts to remove difficulties for the market, helping to increase transparency and strengthen buyers’ confidence.”
Meanwhile, commercial real estate recorded high demand for shopping mall and retail podium space, however, office tenants became cautious with medium-term decisions.
Specifically, the supply of commercial center space increased by 1% quarter-on-quarter and 2% year-on-year. The supply grew by an average of 3% per year over the past 5 years. The rental price also recorded an increase of 13% year-on-year.
The hotel segment, according to Savills Vietnam, is expected to fully recover after 2024. Hotel supply increased by 7% quarter-on-quarter and 10% year-on-year, reaching 10,692 rooms.
Room occupancy continued to improve, reaching 62% in Q2/2023. Average rental price recorded at VND2.5 million/room/night, up 26% year-on-year after a slowing recovery.
Regarding the outlook for the capital’s hotel market, Mr. Troy Griffiths, Deputy General Director, Savills Vietnam, said: “International visitors have not fully returned and Chinese visitors are still below 2019 levels. Although the new visa policy will support growth, the market is expected to fully recover only after 2024.”
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