Luxury apartments flood Hanoi, affordable apartments are absent

In the middle of last week, Singaporean real estate giant Capitaland started construction on a condominium project with a scale of about 2,150 luxury apartments in a large urban area in the East of Hanoi located near Highway 5B. This project is built on an area of ​​2.1 hectares, with a total investment of about 10,800 billion VND.

Currently, the rumor price - the price to probe the market's reaction, not yet official, of this luxury project is from 68 million VND per square meter. Thus, a 2-bedroom apartment, area 81 square meters in this project will cost about 5.5 billion VND.

This is also the second project developed by this foreign investor in the capital this year. Previously - in March, Capitaland started implementing an apartment project with nearly 4,000 luxury apartments in the western region. After three phases of launching in about half a year, this project has so far sold more than 3,920 products - equivalent to consuming 99% of the product basket, although most of the apartments are priced at no less than 70 million VND per square meter.

Masterise Homes has also just introduced the first high-rise housing project of the Vinhomes Global Gate mega-project in Dong Anh district. Positioned by the investor in the high-end segment, the tentative price for this project is at the threshold of nearly 100 million to 130 million VND per square meter. Currently, this is also the highest price for apartment products in the districts on the outskirts of Hanoi.

Studio apartments (wall area 30.5 - 31 m2) with swimming pool view and internal garden have a reference price from 3.26 billion to 3.68 billion VND, equivalent. 3-bedroom apartments (wall area 82 - 82.1 m2) have a reference price of 9.15 billion VND and the highest is 10.2 billion VND. This price is equivalent to 111.5 - 124.2 million VND per m2.

Previously, in the Starlake urban area of ​​Tay Ho Tay, a project of office complex and luxury apartments was also started. According to a broker specializing in this area, this project only has about 280 luxury apartments with prices that can reach up to more than 150 million VND per square meter. Because many apartments in the apartment complex developed in the first phase of the Starlake project are currently being sold on the secondary market from 120 million VND per square meter.

In the West, phase 2 of a luxury apartment project on Le Quang Dao Street is also being advertised by brokers as being available for sale in the last quarter of this year and inviting bookings. The highest price for this project is over 120 million VND per square meter.

High-end, luxury apartment projects continue to appear, while affordable housing continues to be absent in Hanoi. This makes the imbalance in the capital's housing market increasingly serious.

Mr. Nguyen Van Dinh, Chairman of the Vietnam Association of Realtors (VARS), said that the current housing market is mainly high-end for investors and those with a lot of money. The affordable segment, which should be the most popular, has not seen any new projects. Even social housing projects - the type with preferential prices for workers and low-income earners - are also being implemented slowly.

Statistics from the Ministry of Construction also show that Hanoi is among the slowest in developing social housing compared to targets and people's needs. Hanoi must build 18,700 units by 2025, but only 3 projects have started construction (1,700 units) and 5 projects have been completed, with 5,200 units, reaching nearly 37% of the target.

In the middle of the year, Hanoi Chairman Tran Si Thanh even requested that departments and branches coordinate to start at least one more social housing project before October 1. However, the deadline has passed and the city has yet to implement it.

According to experts, units focus on building high-end luxury housing for many reasons, including the need to optimize profits when project investment costs, especially land prices, have increased. Along with that, the game in the current housing market is only in the hands of a few large, potential real estate businesses, no longer diverse investors like before 2020.

CBRE representatives also found that most of the new projects are in large urban areas with existing products already at high prices. Therefore, new buildings will hardly have lower prices than the previous phase or surrounding projects.

Supply has increased again, but next year, the situation of high-end apartments "dominating" the market is unlikely to improve. Consulting and market research services Savills and OneHousing also predict that mid-range and high-end apartments will still dominate. Specifically, according to OneHousing, apartment supply tends to increase, up to 23,000 units in 2025 and 24,000 units in 2026 - nearly 3 times higher than last year, but still mainly high-priced products in the West and East of Hanoi.