Hanoi apartment market to see abundant luxury supply in 2020: JLL

Residential market in Hanoi in 2020 is expected to see an influx of luxury apartments which would account for nearly one third of the total existing luxury stock, according to JLL.

An estimated 1,000 luxury units from four projects are set to be launched next year, the global real estate services firm has said in a recent report.

Luxury apartments in Hanoi are estimated to attract a large number of buyers in 2020

Expected higher prices combined with positive economic outlook will likely prompt buyers to rush to the market, thereby supporting transaction volumes, said the report by the company which specializes in commercial property and investment management.

Local experts said at a conference in Hanoi in mid-January that projects in downtown Hanoi in 2020 would be considered the power of a magnet in the course of limited supply across the city.

In the fourth quarter (Q4) 2019, one luxury project return to the market after a long delay with a soft – launching price at US$6,000 – US$8,000 per square meter (sq.m), an exceptional high price recorded in the city west area.

Regarding supply, in Q4/2019, newly launched projects were well-received with take-up totaling 7,429 units, which are pretty high.

Although sales eased through the quarter, number of unsold units remained low at end-2019 amid limited supply, down 18% on-year.

Buying sentiment towards newly launched projects remained upbeat during the quarter, JLL said, adding that up to 90% of the launching units at Vinhomes Symphony in Long Bien District and 70% of Mipec Rubik 360 in Cau Giay District were sold within one week.

Other than that, pre-sales rate of some new projects is increasingly supported by foreign buyers as local developers had ramped up their overseas marketing efforts, JLL noted.

Meanwhile, mid-end housing remains the major source of supply during the quarter. Over 7,740 units were launched in Q4/2019, down 8.2% on-year.

In 2019, new launches totaled around 32,060 units, predominantly attributed to the mid-end apartments with 75% market share.

In terms of prices, JLL predicted that developers are likely to delay new launches with the view of higher selling prices of their properties in 2020 due to recently-announced land base price policy which is likely to increase this year.

However, JLL said residential market remained the most active sector in terms of investment enquiries. Foreign development groups from across region particularly Japan, Korea, and China continued to explore the development opportunities in prime locations as well as in surrounding neighborhoods.

Prices, meanwhile, were stable during the quarter, at US$1,501 per sq.m, growing moderately 1.5% on-quarter. Mid-end segment was the best performer thanks to entrance of some new projects in good location and developed by reputable developers.