According to Savills' report, the fourth quarter of 2023 is the time when the housing market in Hanoi records the lowest number of new supply in the past 10 years, in both the low-rise and apartment segments.
For the apartment segment, in Q4/2023, supply increased by 52% QoQ but decreased by 1% YoY to 2,876 units. Primary supply reached 11,911 units, down 40% QoQ and 41% YoY.
The common housing prices of both segments remain high. Of which, apartments priced from VND51 - 70 million/m2 account for 63% of new supply, up 24% year-on-year.
Apartments in this price range accounted for 49% of units sold, up 21% year-on-year. Apartments priced above VND4 billion accounted for 42% of units sold in 2023, up from 3% in 2019.
Apartments priced from VND2 to VND4 billion account for 55% of the market share. Only 3% of apartments are priced below VND2 billion.
To buy a house, the opportunity for those with real housing needs may lie in the secondary market. (Photo: Cong Hieu).
For the low-rise segment, in 2023, total new supply reached 272 units, down 82% YoY. Primary supply reached 710 units from 16 projects, down 2% QoQ and 23% YoY. Townhouses were the main product with a market share of 44%.
The number of apartments sold in the fourth quarter of 2023 reached 3,045 units, up 45% quarter-on-quarter and 5% year-on-year. The new supply had an absorption rate of 46%.
For the low-rise segment, although most investors did not change prices, the high-priced low-rise inventory caused primary prices to increase.
For example, primary villa prices increased by 55% quarter-on-quarter to VND160 million/m2 of land, mainly due to low-priced supply in Me Linh being sold in Q3/2023. Townhouse prices increased by 3% quarter-on-quarter to VND194 million/m2 of land. Shophouse prices also increased by 3% quarter-on-quarter to VND328 million/m2 of land.
According to Ms. Do Thu Hang, Senior Director, Research and Consulting Department, Savills Hanoi, the housing segment continues to grow in price due to increased land and construction costs, developed infrastructure and improved quality.
“ The limited supply in the market continues, leading to the average primary selling price in the whole market continuing to increase, ” said Ms. Hang.
According to Ms. Hang, in the context of limited supply and high primary prices, opportunities for those with real housing needs may lie in the secondary market. The secondary market has the advantage of being able to buy with many options, suitable for affordability and with more secure legal status.
For example, the price of secondary villas per square meter of land is 7% lower than the average primary price, secondary townhouses are 24% lower than primary products, and secondary commercial townhouses are 40% lower than primary prices on the market.
At the same time, homebuyers can expect new supply from developing infrastructure. Infrastructure investment projects such as Ring Roads 3, 5 and 4 will expand the Hanoi housing market, aiming to de-concentrate demand in inner-city and central areas.
Developed infrastructure will boost housing demand to neighboring provinces and areas with reasonable prices and larger land funds.
Savills' report also said that this is a positive point for supply, as housing products in non-central areas and neighboring provinces will increasingly help meet Hanoi's housing needs.
Accordingly, in 2024, the market will welcome an additional 12,100 new apartments, with 87% of the market share located in Hoang Mai, Nam Tu Liem and Ha Dong districts. Hung Yen and Bac Ninh will provide about 203,000 apartments from 2024 to 2026. By 2026, the low-rise segment is expected to have 14,000 new apartments from 37 projects.
In addition, the passing of the Housing Law, Real Estate Business Law and most recently the Land Law is expected to have a positive impact on the market.
Ms. Hang said that the regulation requiring investors to fulfill financial obligations before future products are formed is one of the contents that strengthens buyers' confidence.
“ Therefore, it can be believed that in 2024-2025 and the following period, market confidence will be more firmly consolidated, products will be provided by reputable investors with real financial capacity, from which the market will be more balanced and diverse in products, ” said Ms. Hang.
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