Housing demand in Hanoi continues to be pent up
In the Hanoi real estate market report for the first quarter of 2024, Savills Vietnam said that the apartment supply recorded in the quarter 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 imbalance between supply and demand in the apartment segment continues to exist. The market continues to record a shortage of products under VND30 million/m2, these products account for only 4% of new supply and have been sold out. Since 2020, the primary supply of Grade C has decreased by 47% per year.
Illustration photo. (Source: ST)
Ms. Do Thu Hang, Senior Director, Consulting and Research Department, Savills Hanoi commented: The supply is mainly focused on 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 cannot be improved yet," Ms. Hang said.
Meanwhile, in both big cities like Hanoi or 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 house of adults and the average number of people in a house decreasing…
This demand figure has not been met by supply constraints for a while, causing pent-up demand for housing. In addition, macroeconomic factors such as the volatile gold market and low interest rates have caused investors to seek reasonable and long-term investment channels, which has invisibly increased the demand for apartments in the Hanoi market.
According to Savills, when comparing product lines, buyers with real housing needs can see that apartment prices are still more reasonable than those of land-based products in the project such as villas and townhouses.
This leads to a story of increased demand and primary prices for the apartment segment in the first quarter of 2024.
Savills' report in the quarter showed that the primary price of apartments in Hanoi reached 59 million VND/m2, up 3% quarter-on-quarter and 14% year-on-year.
Furthermore, under the condition that primary prices are anchored at high levels, the secondary market also recorded increased trading volume and prices have also increased compared to previous prices.
The secondary market in the past also had a more reasonable price level than the primary price, however, with the increasing demand for housing, secondary prices in the first months of 2024 also recorded an increase.
Some projects have been priced beyond their actual value.
According to Ms. Hang, the psychology of buyers has changed. The view that apartments are "consumables" seems to be a thing of the past, but now this view has changed, buyers are gradually realizing that apartment products in big cities are also an asset.
The view that apartments are "consumables" seems to be a thing of the past. (Photo: PO)
Even if in the past, the decision to buy an apartment needed to be considered for a long time because it was considered a large amount of money, recently home buyers do not wait too long to make a decision to buy. The decision to buy is now made faster and the deposit is also faster.
However, she also explained that this is not the story of the entire market: For apartment projects where the price does not go hand in hand with the product quality, buyers may not make a quick decision. Projects in Q1/2024 that attract the market's attention are all projects from reputable investors with products that, once launched on the market, have a certain guarantee of quality as well as other legal factors.
At the same time, these investors often use leading brands and consulting units, from design units, landscape design units, and product design units.
Many projects have even had investors choose reputable foreign units to enhance the reputation of the project itself. Good projects, reputable investors, and guaranteed legality are the projects that record positive transaction volume.
Faced with escalating prices, some projects have been priced beyond their actual value. Ms. Hang advised buyers to carefully consider the value of use and the reasonableness of the project.
“In general, if prices continue to increase, buyers will consider their financial situation. While real housing demand still accounts for the majority, if prices continue to rise, buyers can consider and choose to rent apartments in the inner city, or accept shifting demand to supply in neighboring provinces of Hanoi with reasonable prices,” said Ms. Hang.
Source: https://www.congluan.vn/mot-so-du-an-chung-cu-tai-ha-noi-duoc-day-gia-vuot-qua-gia-tri-thuc-te-post292403.html
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