According to the Vietnam Association of Realtors (VARS), as of the third quarter of 2024, the apartment price index in Hanoi increased by 64% compared to the second quarter of 2019, double the increase in Ho Chi Minh City. The average primary selling price is approaching VND60 million/m2.
In the first 9 months of 2024, the Hanoi real estate market recorded more than 13,000 new products, an increase of about 25% compared to the total supply for the whole year of 2023.
Of which, 87% of the supply is in the high-rise type, mainly from high-end and luxury projects of large investors, concentrated in the East and West of the city. However, the affordable apartment segment is completely absent from the market, while mid-range apartments are increasingly scarce.
Synthesis from market reports of research units shows that apartment prices have increased from an average of 40 million VND/m2 in 2022 to more than 70 million VND/m2 by the end of the third quarter of 2024. Many mid-range projects have prices above 100 million VND/m2. Apartment prices have increased in both the primary and secondary markets, including old projects. During the fever period, prices have increased by the day and by the week.
According to data from PropertyGuru Vietnam, in November 2024, the selling price of apartments in Hanoi reached 61 million VND/m2, surpassing Ho Chi Minh City by 55 million VND/m2. Mr. Dinh Minh Tuan - Southern Regional Director of PropertyGuru Vietnam said - in 2024, nearly 67% of new supply in the market will be in the high-end and luxury segment in Hanoi.
It is forecasted that by 2025, Hanoi will have lost its primary segment with a price of VND50 million/m2. The fact that the current housing supply is mainly focused on the mid-range and high-end segments and above is one of the reasons why housing affordability has declined sharply in the past few years.
According to the Vietnam Association of Realtors (VARS), there is currently a shortage of suitable housing supply. The demand for affordable housing is the main demand of the market. Some investors "take advantage" of the scarcity of market supply to unreasonably increase selling prices, causing real estate prices to increase, even in areas without many advantages in infrastructure, also causing difficulties for those who have a real need to buy housing.
According to Mr. Ngo Huu Truong - Deputy General Director of Hung Thinh Corporation, real estate has long been considered a valuable asset, especially in Asian countries, where there is a mentality that land and houses are savings.
From the perspective of a real estate developer, Mr. Truong pointed out 3 factors that have increased housing prices in the past 3 years. That is the long time to complete legal procedures, according to which the project approval process takes a lot of time, from site clearance to completing legal procedures. This increases investment costs, thereby pushing up real estate prices.
Second, according to current regulations, land auctions must follow market prices, which leads to higher input costs for housing projects, pushing up real estate prices.
Third is the impact of inflation and exchange rates. Although inflation in Vietnam is well controlled, the increase in the price of gold and USD compared to VND has created upward pressure on real estate prices, because many investors use these assets as a basis for accumulating value. Therefore, real estate prices will be very difficult to decrease in the coming period.
