Ending the cycle of housing shortage in Hanoi

On the morning of October 8, at a press conference announcing the Hanoi real estate market highlights for the third quarter of this year, Ms. Nguyen Hoai An, Senior Director of CBRE Vietnam Hanoi Branch, said that 2024 seems to end the cycle of housing supply scarcity in Hanoi over the past 4 years, with the total apartment supply for the whole year of 2024 expected to reach nearly 30,000 apartments.

The supply of landed housing market also reached a multi-year high of 5,000 units, just after 2022.

According to Ms. Nguyen Hoai An, positive purchasing power, combined with quality projects developed by experienced investors, will be the premise for stronger market development.

CBRE leaders said that in the first 9 months of this year, the total supply of newly launched apartments in Hanoi reached more than 19,000 units, exceeding the total supply for the whole year of 2023. Accordingly, the Hanoi apartment market in the third quarter continued to record a large new supply, reaching approximately 8,230 units, nearly equal to the new supply of the previous quarter.

According to Ms. Nguyen Hoai An, Senior Director of CBRE, this is the largest new apartment supply recorded in Hanoi in the past 5 years. The supply launched in this quarter comes from 11 projects, mainly projects developed in urban areas in the West and East of the city; of which, this quarter recorded 5 projects launched for the first time, mostly concentrated in Nam Tu Liem, Tay Ho, Gia Lam districts and Van Giang district (Hung Yen province bordering Hanoi).

In terms of segments, more than 75% of the total new supply in the coming quarter will come from luxury apartment projects; of which, only 2 projects have an offering price of around VND50-60 million/m2, the remaining projects all recorded an average primary price of over VND60 million/m2 (excluding VAT and maintenance fees). Notably, the Hanoi apartment market this quarter saw the appearance of a luxury project in Tay Ho district.

The liquidity of the Hanoi apartment market this quarter is also one of the highlights. Although the newly launched supply is relatively large, the market's purchasing power is still very positive. The total number of apartments sold in the quarter exceeded 8,000 units, although down 20% compared to the previous quarter due to many projects opening for sale simultaneously in the second and third quarters, this figure is still more than double that of the same period last year.

Development projects in major urban areas in the East and West continue to demonstrate strong appeal to homebuyers, with sales rates recording over 90% in the first quarter of sales.

In particular, CBRE assessed that the selling price of apartments in Hanoi continued to record an upward trend in both the primary and secondary markets. In the primary market, the average selling price of apartments in Hanoi reached VND64 million/m2 (excluding VAT and maintenance fees), only 3% lower than the current average price in Ho Chi Minh City, up 8.7% compared to the previous quarter and up 26% year-on-year.

According to CBRE, the limited new supply over many years has increased purchasing power, while pushing up primary prices rapidly. In addition, the newly launched apartment fund includes many high-quality projects, developed in an urban complex with full amenities, and conveniently located to connect to the central area of ​​Hanoi and areas with concentrated offices and commercial services, which can be offered at high prices.

In the secondary market, the average selling price continued to increase from the previous quarter, reaching VND46 million/m2 (excluding VAT and maintenance fees), up 5.5% quarter-on-quarter and nearly 26% year-on-year. The increase in secondary selling prices of Hanoi apartments has not shown any signs of stopping and is currently only about VND2 million/m2 higher than the secondary price of Ho Chi Minh City apartments. In this quarter, apartment projects that have been completed and handed over for a long time, located in areas with densely populated communities with many amenities and services, recorded the highest increase in secondary prices.

It is forecasted that in the last quarter of this year, new supply will record more than 10,000 units, bringing the total number of newly launched apartments for sale in 2024 to nearly 30,000 units, nearly three times the number of units launched in 2023 and the highest supply in the past 5 years. In addition, secondary selling prices will continue to increase in the context of abundant primary supply, but with a more stable increase.

Regarding landed properties, the supply of newly launched landed properties in the third quarter of 2019 in Hanoi recorded a significant improvement compared to the first two quarters of the year, with more than 3,200 newly launched units, of which nearly 80% of the new supply came from an urban project in Dong Anh that was launched for the first time.

In total, in the first 9 months, the total new supply of landed housing in Hanoi reached more than 3,500 units, the highest level in the past 5 years. The total number of units sold was recorded at more than 3,400 units, almost equal to the new supply launched during the period.

CBRE expects that from now until the end of 2024, the new supply of landed housing in Hanoi will have nearly 5,000 new units for sale, mainly from projects in the West and East of Hanoi.