Q4/2023: Hanoi real estate remains unaffordable for most

In the fourth quarter of 2023, property prices in Hanoi continued to rise sharply, driven by tight supply and strong market demand on expectations of improved road infrastructure.

An apartment block in Hanoi. Photo: Doanh Thanh/The Hanoi Times

Property research firm CBRE Vietnam said in its quarterly report for Q4/2023 that around 4,500 apartments have been listed in Hanoi, bringing the total offer to around 11,400 apartments.

This is the lowest supply in 10 years and most of the listings are classified as luxury, according to CBRE. Meanwhile, the average price of new apartments rose by 7% on a quarterly basis and 14% on an annual basis to around VND50.8 million/m2 (almost US$2,100/m2).

According to some real estate agents, buyers sought second-hand apartments because they were conveniently located, with good transport infrastructure and amenities, and title deeds were readily available.

Such demands pushed up housing prices in urban districts, especially those with many  residential projects such as Ha Dong, Thanh Xuan, Cau Giay, Bac Tu Liem, Nam Tu Liem and Tay Ho, as well as in rural districts where major roads pass through or near.

In Cau Giay District, the price of apartments in the resettlement building in Slot A10 of Nam Trung Yen residential area ranged from VND42 million to VND47 million ($1,723 to $1,928) per square meter. In Thanh Xuan District, the average price of apartments in some mid-range projects varied between  VND45 million and VND60 million ($1,846 to $2,461) per square meter.

For apartment projects under construction, prices were estimated to be the highest at VND60-65 million ($2,461-2,666) per sqm.

Not only apartment buildings, but also villas and high-end townhouses were also highly valued. Their prices could rise to around VND470 million ($19,280) per square meter.

"We have run out of stock while the market is heating up. Most of the apartments were sold in the first half of the year, while the owners of the rest are not interested in selling," broker Vuong Quoc Anh told Vietnam News Agency about the Louis Hoang Mai residential area in the southern district of Hoang Mai.

He explained that the buildings are located in a very convenient area, as a 30-meter road was opened in October 2023 to connect the residential area with the Phap Van-Cau Gie highway.

According to some business insiders, they have not seen a decline in the prices of high-end properties, especially in Tay Ho District, which has a convenient road network. Housing prices in central areas have barely declined from their 2022 levels, proving that demand for housing in these areas remains high.

A section of Phap Van - Cau Gie Highway. Photo Thể Ny/giaothonghanoi

In contrast to central and southern Hanoi, the property market in the northern part of the city remains cold in 2023, although major transportation projects, including Ring Road No.4,  are expected to facilitate future growth in the area.

In Soc Son and Me Linh districts, about 30 km from the central area, prices remained low and investors were unwilling to sell their assets to cut losses.

Nguyen Thi Xuan Thu bought two side-by-side plots in Me Linh district's Tien Phong commune two years ago for VND25 million ($1,025) per square meter. In mid-December, she sold her land for VND30 million ($1,230) per square meter.

"It seems that I have suffered a loss from the deal, as the rate of return is only compared to bank savings rates," she said. "Despite the future benefits offered by the Ring Road No. 4 project and upcoming urban development plans, the area remains unattractive due to the lack of legal documents."

According to business insiders, land in Soc Son and Me Linh districts sells for VND12-20 million ($492-820) per square meter, much lower than in other areas of Hanoi because infrastructure is underdeveloped and it may take 10-20 years for the areas to be fully built out.

According to experts, it is understandable for the price of apartments in central districts to rise because the market demand is still high while the supply is short due to the delay of many projects.

High-storey buildings in Hanoi. Photo: The Hanoi Times

Nguyen Van Dinh, chairman of the Vietnam Association of Realtors, said market prices will continue fluctuating due to the supply-demand imbalance, rising material and input costs, and delayed projects.

Some experts have advised that buyers should conduct insightful research on future urban development plans, legal status of projects, and financial leverage.

Meanwhile, real estate trading companies and construction firms have suggested that authorities and government agencies remove bottlenecks in the regulatory system.

According to Tran Sy Thanh, Chairman of the Hanoi People's Committee, the capital plans to build 1.25 million square meters of new affordable houses and apartments in 2025 and another 5.5 million square meters in 2030 to increase supply and lower prices.

In addition, the city authorities will strive to solve existing problems for delayed projects, review and deal with violations, and speed up the progress of real estate construction in the area.