Hanoi housing supply shortage has ended
In the recently released market report, recorded by CBRE (commercial real estate investment and trading company), in the first 9 months, the total supply of newly opened apartments reached more than 19,000 units, exceeding the total supply for the whole year of 2023. This is also the largest total supply of new apartments recorded in Hanoi in the past 5 years.
According to CBRE's forecast, in the last quarter of the year, the market will record more than 10,000 more units, bringing the total number of newly opened apartments for sale in 2024 to nearly 30,000 units, nearly three times the number of units opened for sale in 2023 and the highest supply in the past 5 years.
Previously, in the housing development plan for the 2021-2025 period (phase 3), the Hanoi People's Committee said that there were 85 projects undergoing investment preparation procedures with nearly 50,000 products. After 2025, 26 projects are also expected to be completed with nearly 10,000 units.
According to experts, the supply of apartments is expected to increase in the next two years, reaching 23,000 units in 2025 and 24,000 units in 2026 - nearly 3 times higher than in 2023. This supply is expected to still come from two major cities in the West and East.
Despite the improvement in supply, the average secondary selling price at the end of Q3/2024 continued to increase from previous quarters. The average secondary price of landed properties in Hanoi this quarter reached approximately VND167 million/m2 (including construction costs and excluding VAT), up 3% quarter-on-quarter and nearly 7% year-on-year.
Some projects in areas such as Dong Anh and Long Bien recorded higher secondary price increases of about 5% quarter-on-quarter, thanks to infrastructure development and the launch of new projects.
Reasons for abundant supply but prices still increase
Although there are many forecasts of abundant supply, even past the point of apartment shortage, research units all conclude that new supply mainly comes from the high-end segment and above, while affordable apartments do not appear.
Therefore, the housing demand for the majority has not improved much and the housing price in Hanoi in the coming time is forecast to be difficult to decrease. According to Mr. Nguyen Chi Thanh - Vice President of Vietnam Association of Real Estate Brokers (VARS), the supply of apartments has improved significantly but only focused on the high-end segment, while there are no apartments for middle-income people.
According to Mr. Thanh, this imbalance between supply and demand leads to increasing apartment prices, while the housing needs of the majority are still not met. This is an irrationality of the real estate market where apartments that have been in use for ten years still increase in price rapidly.
At the same time, Ms. Hoa Dung - Director of Sales and Communications, Con Bap Eco-Tourism Company also said that the real estate market is showing signs of imbalance with product types when businesses rush to implement high-end apartment projects. This not only makes the market scarce with average products at suitable prices, but also poses a risk of market manipulation because there are no average products to create competition, no competition, no market pressure, no one is willing to reduce prices.
Recently, at the regular Government Press Conference, Mr. Nguyen Viet Hung - Deputy Minister of Construction also said that there are 3 main reasons leading to the high and sudden increase in real estate prices in recent times due to demand being much greater than supply. In addition, the real estate market has also experienced price increases and price inflation. Typically, recently, Hanoi organized land auctions, auction participants pushed up land prices and then abandoned their deposits. The third reason is that investment and input costs of real estate have increased.
