Since the beginning of the year, the residential real estate market in Hanoi has shown a clear “heating up” led by the apartment and alley house segments. In particular, the heat of the apartment segment is reflected in the continuously increasing prices, the number of transactions and interest have increased sharply in both the primary and secondary markets. Newly launched projects have attracted the attention of the market with good absorption rates despite the high selling prices of primary products.
Analyzing the reasons for this situation, Mr. Nguyen Quoc Anh - Deputy General Director of PropertyGuru Vietnam - said that the Hanoi real estate market is in the early stages of recovery after a difficult period. Therefore, the market sentiment is weak with concerns about liquidity, so investors are looking for types with solid legal status and cash flow such as apartments.
In addition, the supply has not met the market demand while the housing demand in Hanoi is very large. The difference in supply structure when the high-priced segment accounts for the majority, in the third quarter of 2024, the supply of products over 55 million accounts for nearly 60%, the mid-range segment accounts for the remaining 40% while affordable housing is no longer available. In the context of low supply in the market, investors, after removing legal issues and bringing products to the market, all focus on developing the supply from mid-range and above.
Third is the market psychology factor: “When apartment prices have not increased much, people tend to wait for a price reduction. But when prices increase by 10-20%, they rush to buy because they are afraid that prices will continue to increase. This is a psychological blow that causes apartment prices to increase again,” said Mr. Quoc Anh.
Forecasting the price trend in the coming time, Mr. Quoc Anh said that the price level of apartments in the coming time is very difficult to decrease. However, the expert predicted that the market next year will be flat, not as hot as it is now. "Any market after a period of overheated development will at least be flat, it cannot increase forever" - Mr. Quoc Anh commented.
Meanwhile, Mr. Le Dinh Chung - General Director of SGO Homes said that the main reason for the high housing prices is that large investors monopolize the supply, leading to price fluctuations. In addition, high investment costs, high demand while supply is scarce, causing investors to have higher expectations for profits, are also the reasons for the unusually high prices.
The General Director of SGO Homes predicts that Hanoi apartment prices will continue to increase in the short term, at least from now until mid-2025. In the long term, with the Government's solutions such as developing social housing and removing legal obstacles, real estate prices will be controlled and kept stable. However, these solutions are only aimed at avoiding price escalation, and it is impossible for apartment prices to decrease sharply.
