Earning 250 million VND/year, how long does it take to buy a house in Hanoi?

A newly released market report by Savills Vietnam shows that in the third quarter of 2024, the apartment market in Hanoi recorded growth in supply and number of transactions, with the Class B segment dominating.

However, the gap between income and housing prices is becoming increasingly evident, causing certain difficulties for home buyers.

In addition, the villa and townhouse market in Hanoi recorded an increase in supply in suburban areas, with absorption rates increasing by 30 percentage points compared to the previous quarter and primary prices decreasing due to the location of new supply in the quarter being far from the city center.

People find it difficult to reach their dream of settling down when housing prices continue to increase.

In the first 9 months of 2024, the apartment market in Hanoi recorded more than 12,000 new launches. In the third quarter of 2024, there were 5,265 new apartments provided, a sharp increase of 95% quarter-on-quarter and 178% year-on-year.

However, primary supply still decreased by 47% compared to the same period last year. Despite the limited primary supply, the number of apartments sold reached 6,840 units in Q3/2024, 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. Statistics from Savills show that 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.

Earning 250 million VND/year, people have to spend 18 years without spending to own a house in Hanoi (Photo: Huu Thang).

Regarding prices, Ms. Do Thi Thu Hang - Senior Director, Research and Consulting, Savills Hanoi, said that the price of houses for sale in Hanoi is 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.

In the secondary market, the average price of apartments in the third quarter of 2024 is VND51 million/m², up 10% compared to the previous quarter and 41% compared to last year.

Average secondary prices increased by 17% per year since 2020, with Grade C increasing the most at 20% per year, followed by Grade A increasing by 16% per year and Grade B increasing by 15% per year.

Many buyers are shifting from the primary to the secondary market because of the greater choice and legal certainty that this market offers.

In this context, Savills experts assessed: "Although the market is growing, the gap between household income and housing prices is becoming increasingly clear. 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 6% per year, home prices on the secondary market have increased by an average of 17-20%, causing many difficulties in buying a home."

Entering the fourth quarter of 2024, the market is expected to welcome an additional 9,700 new apartments, of which 88% will come from the next phases of large projects.

From 2025 onwards, approximately 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 needs of products in the market.

The early application of the Land Law, Real Estate Business Law and Housing Law, along with the gradually published guiding documents, will continue to bring positive impacts to the market, but this process will not happen quickly."

Villa supply grows well

The villa and townhouse segment concentrated in suburban areas shows that new supply reached 176 units, up 38% quarter-on-quarter in Q3/2024.

Primary supply reached 673 units from 15 projects, up 11% QoQ but down 7% YoY. Villas and townhouses were the dominant type, each accounting for 38% of primary supply.

These projects have lower selling prices due to their remote location from the city center. The average primary price in the third quarter of 2024 tends to decrease compared to the previous quarter. A large amount of primary supply is concentrated in suburban projects.

Primary villa prices decreased by 16% quarter-on-quarter to VND150 million/m2 of land. Townhouse prices decreased by 17% quarter-on-quarter to VND156 million/m2 of land. Shophouse prices decreased by 14% quarter-on-quarter to VND249 million/m2 of land.

Meanwhile, the secondary market recorded a steady increase in prices, both compared to the previous quarter and the same period last year. This is a sign that villas and townhouses are still considered an attractive option for investors in the secondary market.

Secondary prices of villas were 13% higher than primary prices, up 3% quarter-on-quarter to VND169 million/m2 of land. Townhouses increased 4% quarter-on-quarter to VND187 million/m2 of land, 20% higher than primary prices.

Primary villa prices decreased by 16% quarter-on-quarter to VND150 million/m2 of land (Photo: Huu Thang).

Savills experts said: "Despite fluctuations in supply and prices, the villa and townhouse market in Hanoi in the third quarter of 2024 recorded many positive signals, with an absorption rate of 48%, up 30 percentage points compared to the previous quarter and the same period last year."

Projects in suburban areas such as Ha Dong district, Me Linh district and Thuong Tin district have high demand. Me Linh leads the primary transaction volume with 37%, followed by Ha Dong with 33% and Thuong Tin with 12%.

Savills forecasts that absorption will continue to change when the infrastructure of Vinhomes Global Gate project is expected to be completed and contracts will begin to be signed around October 2024, providing 2,599 units to the market.

The three projects will supply a total of 2,975 units in the next quarter. Dong Anh district will account for the majority of future supply with 19%. Me Linh district follows with 16% and Ha Dong district with 15%.

Source: https://www.nguoiduatin.vn/kiem-250-trieu-dong-nam-phai-mat-bao-lau-de-mua-duoc-nha-ha-noi-204241009161615798.htm