Prices of many new apartments are about to be equal to villas and townhouses

Over the past few weeks, a five-tower apartment project on Vo Chi Cong Street, Tay Ho District, has opened its inventory for booking, with rumored prices - a price to test market reaction, not yet official - of about 6,800-10,700 USD, equivalent to 170-268 million VND per square meter, excluding VAT. The products for sale in the first phase have an area of ​​76-284 square meters, corresponding to 1-4 bedrooms.

With a rumored price of nearly 200 million VND per square meter, the smallest one-bedroom apartment in the project is offered for nearly 13 billion VND. A two-bedroom apartment with an area of ​​over 170 square meters is up to 39 billion VND, equivalent to 229 million VND per square meter. The main supply in the project is the sky villa product line with an area of ​​105-284 square meters, priced at 25-85 billion VND (from 238 million VND per square meter).

Less than 200 meters from the above project are two apartment buildings of a Singaporean investor that were just handed over in August. The project is located on Lac Long Quan Street, providing more than 170 apartments with areas ranging from 94 to 330 square meters. Launched in 2022, apartments here are priced from 120 million VND per square meter. Currently, some apartments are being offered for sale at 150-180 million VND per square meter. For example, a 3-bedroom apartment with an area of ​​180 square meters in the project is being offered for sale at 28 billion VND.

The director of a trading floor specializing in distributing apartments in the West Lake area said that the unit price of apartments of more than 200 million VND per square meter is "chasing" the surrounding villas and townhouses. For example, the transfer price of some villas in the Ciputra Urban Area is about 290-350 million VND per square meter, depending on the location. Some 95-square-meter townhouses handed over in a raw state here are also listed at 30 billion VND, competing with 4-bedroom apartments in the two projects above.

According to the second quarter data of Avison Young Research, villas and townhouses in the Diplomatic Corps area have secondary prices of about 10,200-14,700 USD per square meter (about 255-368 million VND), depending on location. In Ciputra Urban Area, villas and townhouses are being offered for transfer at 11,000-15,900 USD per square meter.

Mr. David Jackson, General Director of Avison Young Vietnam, said that the price of new apartments in Hanoi is increasing rapidly in the direction of "establishing a new level" with an increasing proportion of high-end supply. However, for projects in the booking stage, the selling price is not yet official for investors to probe the level of interest of potential buyers.

According to records, the price of over 100 million VND per square meter has only appeared since the end of 2021 and the beginning of 2022. Previously, the Hanoi market did not record any primary projects with this price. However, since the beginning of the year, this product line has tended to appear more. In Ba Dinh district, an apartment project on Lang Ha street with Indochina Capital as strategic consultant is about to launch in September, with many investors predicting a price of no less than 100 million VND per square meter.

Some projects near the Ring Road 3 area also have similar prices. For example, 5 towers on Thang Long Avenue are opening the third phase of sales, with prices of 80-90 million VND per square meter. Penthouses in this project are offered from 100 million VND per square meter. Or phase 2 of an apartment project located in Me Tri ward, Nam Tu Liem district, expected to launch on the market at the end of this year, is also being offered by many brokers from 100 million VND per square meter.

Explaining the above developments, Avison Young General Director said that in the previous stage, prime location determined the selling price, so the hundred million VND per square meter mark was mainly associated with the inner city district. Currently, the central land fund is increasingly limited, high-end supply tends to expand its boundaries and appear in the suburbs. According to experts, in addition to location, the selling price of a product also includes the brand, the level of investment in utilities, management and operations...

Mr. David Jackson said that the proportion of luxury apartments tends to increase in the coming time. He forecasts that this year's supply will reach about 8,000 units, of which the luxury segment accounts for three-quarters, the rest is mid-range. Affordable apartments continue to disappear from the market.

Sharing the same view, Mr. Nguyen Chi Thanh, General Director of Ho Tay International Building Company, said that any investor with the advantage of available land funds wants to build and do business in the high-end segment or higher to optimize profits, in the context of increasing land prices and project development costs. The fact that the market has a number of projects with prices of hundreds of millions of VND per square meter at this time is the result of nearly two years of continuous price increases in apartments.

Experts warn that investors rushing to develop the high-end and luxury segments will cause an imbalance in supply and make the phase difference worse. In fact, in the first 9 months of this year, high-end apartments "overwhelmed" the market, while mid-range to affordable supply was almost absent. Savills data shows that the market had no new supply under VND45 million in the second quarter. Meanwhile, primary prices continued to increase by 18% per year from 2020 to present.

"The rising price of apartments also increases the rental price, affecting the affordability of buyers and renters," said the CEO of Ho Tay International Building Company.