Hanoi house price 59 million VND/m2, experts advise on how to buy within budget

Savills' Hanoi real estate market report for the first quarter of 2024 shows that the primary price of apartments in Hanoi has reached VND59 million/m2, up 3% quarter-on-quarter and 14% year-on-year.

The supply-demand imbalance in the apartment segment remains. The market continues to record a shortage of products under VND30 million/m2 (Class C) as these products account for only 4% of new supply and have been sold out. Since 2020, the primary supply of Class C has decreased by 47% per year.

In the face of escalating housing prices, Ms. Do Thu Hang, Senior Director, Consulting and Research Department, Savills Hanoi, advised that home buyers with real housing needs can choose supply sources in neighboring localities such as Hung Yen or Bac Ninh, beltway 4 or beltway 3.5.

With infrastructure development, suburban areas will be pulled "closer" to the city center, helping to reduce travel time.

" In neighboring provinces or suburban areas, investors can access land at lower costs, creating a more affordable housing supply ," said Ms. Hang.

Apartment prices in Hanoi reached VND59 million/m2 in the first quarter of 2024. (Illustration photo: Cong Hieu)

Savills' report also shows that the supply of apartments in Hanoi recorded in the first quarter of 2024 increased by 41% quarter-on-quarter and 99% year-on-year with 4,062 units. The primary supply in the quarter reached 12,928 units, up 9% quarter-on-quarter but down 34% year-on-year.

" The supply is mainly concentrated in Class B apartments, accounting for nearly 90%. The Class C apartment segment in the primary market and Class A apartments only account for a very small proportion. Moreover, from now until the end of the year, although major laws have been passed, new supply still cannot be improved ," Ms. Hang predicted.

Meanwhile, in both major cities such as Hanoi and Ho Chi Minh City, the natural annual demand for housing is about 50,000 houses. This is the result of immigration, moving out of the home of adults and the average number of people in a house decreasing... This demand has not been met by limited supply for a while, causing pent-up demand for housing.

Macro factors such as the fluctuating gold market and low interest rates also cause investors to seek reasonable and long-term investment channels, which invisibly increases the demand for apartments in the Hanoi market.

Sharing the same view as Ms. Hang, Mr. Nguyen Quoc Anh, Deputy General Director of PropertyGuru Vietnam, emphasized the need to promote the construction and upgrading of public transport systems, including metro lines. Convenient transportation will encourage people to move out of the city center, reducing the pressure on housing demand in the inner city.

According to Mr. Quoc Anh, this will help people buy affordable houses and, in the long term, reduce housing prices in the center of big cities.

Previously, the real estate market report for the first quarter of 2024 by PropertyGuru Vietnam showed that after 6 years, the average price increase of apartments in Hanoi reached 70%. Specifically, apartments in Hanoi have an average price of 46 million VND/m2, while the price of apartments in Ho Chi Minh City is 48 million VND/m2.

At the beginning of 2018, the selling price of apartments in Hanoi and Ho Chi Minh City was only 27 and 31 million VND/m2.

Many studies have also shown that over the years, the growth rate of housing prices is much higher than the growth rate of people's income. According to Savills Vietnam, Hanoi is striving to have an average income per capita of 150 million VND/person/year in 2023, compared to 2019, the average income growth rate is 6%/year.

Meanwhile, apartment price growth from 2019 to the first half of 2023 is up to 13%/year.

“ This figure shows that the growth in per capita income in Hanoi is nearly half lower than the growth in apartment prices ,” said Ms. Do Thu Hang.

Ms. Hang warned that home ownership will become even more difficult if this gap widens.

Dr. Le Xuan Nghia, a finance and banking expert, also cited evidence of the huge gap between housing prices and people's income.

Specifically, a worker aged 30 or younger with an average income of about 15 million VND/month, minus living expenses in big cities like Ho Chi Minh City or Hanoi, has about 6 million VND left, so it would take at least 20 years to save 1.5 billion VND. With an income of 20 - 30 million VND/month, to buy a 1.5 billion VND apartment, it would take 10 - 15 years to save.

According to PropertyGuru Vietnam, the average selling price of all types of housing in Hanoi is 22.8 billion VND/unit for townhouses; 17.8 billion VND/unit for villas; 6.3 billion VND/unit for private houses and 3.1 billion VND/unit for apartments. Meanwhile, the estimated average income of workers in Hanoi in 2023 is 135 million VND/year.

Thus, to own a street-front house in Hanoi, people need to "work hard" for 169 years, to own a private house it takes 132 years, and to buy an apartment it takes 23 years (assuming that workers use all their income to buy a house).

Chau Anh

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