Affordable apartments disappear from Hanoi market

By Vu Pham, Minh Hue
Tue, July 16, 2024 | 10:14 am GMT+7

In the second quarter of 2024, Hanoi's real estate market saw no supply of new apartments priced below VND45 million ($1,774) per square meter, a level considered affordable, according to Savills Vietnam.

  Apartment blocks in Hanoi. Photo by The Investor/Trong Hieu.

Apartment blocks in Hanoi. Photo by The Investor/Trong Hieu.

Its report on the Hanoi real estate market in Q2/2024 showed that new supply in Q2 decreased 34% quarter-on-quarter and 25% year-on-year, with 2,697 units. Of which, the next phases of seven projects provided 2,637 units, or 98%, while the remaining 2% came from The Gloria by Silk Path in Ba Dinh district. The primary supply of 10,317 units fell 20% quarter-on-quarter and 49% year-on-year.

Since 2020, the primary supply of affordable apartments (Grade C) has plunged 45% each year. In the future, this segment will contribute 25% of supply, said Savills Vietnam.

"Hanoi prioritizes infrastructure development, creating immediate real estate demand and a long-term growth foundation. Key projects for affordable housing options are in suburban areas and neighboring provinces," said the firm.

Due to limited new supply, new apartment sales continued to increase. Specifically, the number of units sold reached 5,085, down 4% quarter-on-quarter but up 104% year-on-year. Grade B apartments accounted for 96% of the total sales. The new supply recorded an absorption rate of 59%.

The primary prices averaged VND65 million ($2,562) per square meter, up 10% quarter-on-quarter and 24% year-on-year. "Since 2020, the primary prices have expanded 18% per year, while those in the secondary market have increased by 14% per year," it noted.

Increased primary prices and reduced primary supply have created conditions for secondary prices to rise. Secondary products are mostly ready for people to live in, with full legal status.

In the second half of the year, the Hanoi market will have eight new offerings of the next phases of two existing projects, supplying 13,460 Grade B apartments. New supplies of Grade A and C apartments will not be available. Nam Tu Liem, Ha Dong and Gia Lam districts will account for 93% of the market share. From 2025 onwards, Hanoi will welcome nearly 100,000 apartments from 105 projects.

Future major projects include Vinhomes Co Loa (385 hectares), North Hanoi Smart City (272 hectares) and Vinhomes Wonder Park (133 hectares). These projects, all developed by well-known and branded investors, will contribute 40% of the future supply.

Do Thi Thu Hang, senior director of advisory services at Savills Hanoi, said that the prospects for the Hanoi real estate market are based on the increased personal assets and the expanding middle-income class. Improved infrastructure has spurred the development of large-scale projects nearby.

Meanwhile, Nguyen Van Dinh, chairman of the Vietnam Association of Realtors (VARS), stated that since 2018, policies related to capital sources and decisions by agencies on controlling the real estate market have caused housing supply to plummet. Meanwhile, the demand for housing has been constantly increasing, pushing prices in Hanoi to new heights, especially in the apartment segment.

"Apartment prices in Hanoi have increased for dozens of consecutive quarters. The capital’s apartment price index in the first quarter of 2024 increased by 48 percentage points compared to Q1/2019 and 8 percentage points from Q4/2023 - the highest increase in the past five years," he said.

Dinh attributed the increase in Hanoi apartment prices to continuously improved infrastructure that has pushed up real estate value. But a hike of three or four times in housing prices is unreasonable, he noted, adding the Hanoi market is too short of supply.

"From now until 2025, on average each year, Hanoi will face a shortage of about 50,000 apartments. Meanwhile, the number of newly licensed commercial housing projects is continuously decreasing, and the market is completely absent of affordable apartments," he said.

He stressed the need for coordination between state agencies and market participants to stabilize the market.

Townhouses, villas yet to improve, but prices still on the rise

In contrast to the apartment segment, Savills Vietnam's report pointed out that the townhouse and villa segments did not see improvements in Q2.

New supply reached 128 units, up 38% quarter-on-quarter but down 2% year-on-year, mainly coming from two existing projects in Ha Dong: An Quy Villa project with 54 units and Solasta Mansion with 51 units. Meanwhile, An Lac Green Symphony in Hoai Duc district provided 12 new townhouses and Him Lam Thuong Tin in Thuong Tin district 11.

Primary supply counted 608 units from 16 projects, down 9% quarter-on-quarter and 24% year-on-year. Villas dominated with 39% of the total primary supply.

During the quarter, 111 units were sold, down 40% quarter-on-quarter but up 5% year-on-year. The new supply had an absorption rate of 48%, down 15 percentage points quarter-on-quarter and 3 percentage points year-on-year.

The majority of primary transactions (61%) were recorded in Ha Dong district thanks to nearly completed infrastructure projects such as Le Quang Dao street, expected to be put into use in Q4/2024. Hoang Mai and Hoai Duc districts followed with 14% and Thuong Tin district 9%.

Notably, the supply of villas from high-priced projects led to the primary price of villas increasing by 9% quarter-on-quarter to VND178 million ($7,013) per square meter. The row house price decreased 2% quarter-on-quarter to VND188 million per square meter because many high-priced units were sold and only low-priced units remained. Meanwhile, the price of townhouses went up 3% quarter-on-quarter to VND288 million per square meter due to a lack of cheap products.

High primary selling prices continued to boost the secondary market. The secondary price of villas was 8% lower than the primary price, while the row house price was 5% lower.

In the second half of this year, the Hanoi market will welcome 13 projects with 2,951 units, with Dong Anh district accounting for 34%, Ha Dong 19%, and Hoai Duc 16%.

Comments (0)
  • Read More
Halal market presents major opportunities for Vietnamese businesses

Halal market presents major opportunities for Vietnamese businesses

The global Halal market is projected to reach $5 trillion by 2030, with Malaysia alone expected to hit $113.2 billion, said Shariza binti Abdul Rasheed, Halal product manager at Maybank Malaysia.

Economy - Thu, August 7, 2025 | 9:18 pm GMT+7

Steel major Hoa Phat to pour extra $130 mln into central Vietnam plant

Steel major Hoa Phat to pour extra $130 mln into central Vietnam plant

Vietnam’s leading steelmaker, Hoa Phat Group (HoSE: HPG), will increase investment in its Dung Quat 2 iron and steel production complex by VND3.4 trillion ($129.7 million) as part of an expansion plan.

Industries - Thu, August 7, 2025 | 8:03 pm GMT+7

Vietnam’s army-backed construction firm proposes 14 offshore wind power projects

Vietnam’s army-backed construction firm proposes 14 offshore wind power projects

Lung Lo Construction Corporation (LLC), under the Ministry of National Defense, has submitted investment proposals for 14 offshore wind power projects with a combined capacity of 9,000 MW.

Energy - Thu, August 7, 2025 | 5:07 pm GMT+7

Vietnam's agri major Hoang Anh Gia Lai fined for bond information disclosure failure

Vietnam's agri major Hoang Anh Gia Lai fined for bond information disclosure failure

Vietnam's agri major Hoang Anh Gia Lai JSC has been fined VND92.5 million ($3,528) for failing to disclose bond-related information as required by law.

Companies - Thu, August 7, 2025 | 4:31 pm GMT+7

Northern Vietnam province accelerates $2.2 bln LNG-to-power project

Northern Vietnam province accelerates $2.2 bln LNG-to-power project

Quang Ninh province will hand over 4.9 hectares of reclaimed land to the Quang Ninh LNG-fuelled power plant project before August 11, local authorities stated at a meeting on Wednesday.

Energy - Thu, August 7, 2025 | 4:17 pm GMT+7

Vietnam's seafood firms ride profit wave ahead of US tariff hike

Vietnam's seafood firms ride profit wave ahead of US tariff hike

Vietnam’s seafood companies reported surging profits in Q2/2025, driven by importers ramping up purchases ahead of new U.S. reciprocal tariffs.

Economy - Thu, August 7, 2025 | 2:21 pm GMT+7

Le Anh Tuan appointed new CEO of Dragon Capital Vietfund Management JSC

Le Anh Tuan appointed new CEO of Dragon Capital Vietfund Management JSC

Dragon Capital Group, Vietnam's largest asset manager, has appointed Le Anh Tuan as CEO of its arm Dragon Capital Vietfund Management Joint Stock Company (DCVFM), starting from October 1, 2025.

Companies - Thu, August 7, 2025 | 2:01 pm GMT+7

Indonesia, Malaysia, Thailand expand local currency transaction network

Indonesia, Malaysia, Thailand expand local currency transaction network

Bank Indonesia, Bank Negara Malaysia, and Bank of Thailand have added new Appointed Cross Currency Dealer (ACCD) participating banks to broaden services for bilateral transactions in local currencies across the three nations, Bank Indonesia said in a statement on Tuesday.

Southeast Asia - Thu, August 7, 2025 | 12:48 pm GMT+7

ASEAN to sign MoU on regional power grid implementation

ASEAN to sign MoU on regional power grid implementation

ASEAN member states are set to sign an MoU on the implementation of the ASEAN Power Grid during the bloc’s Energy Ministers’ Meeting this October.

Southeast Asia - Thu, August 7, 2025 | 12:43 pm GMT+7

Vietnam overtakes Thailand to become world's second-largest rice exporter

Vietnam overtakes Thailand to become world's second-largest rice exporter

Vietnam has outranked Thailand as the world’s second-largest rice exporter in the first half of 2025, Thai PBS reported on August 3, citing the Thai Rice Exporters Association.

Companies - Thu, August 7, 2025 | 12:41 pm GMT+7

Vietnam posts trade surplus of $10.18 bln in 7 months

Vietnam posts trade surplus of $10.18 bln in 7 months

Vietnam’s export earnings grew by 14.8% to $262.44 billion in the first seven months of this year, while its import turnover rose by 17.9% to $252.26 billion, resulting in a trade surplus of $10.18 billion.

Economy - Thu, August 7, 2025 | 12:19 pm GMT+7

Malaysia pledges big purchases, investments with US

Malaysia pledges big purchases, investments with US

Malaysia has agreed to buy and invest over $240 billion (MYR1.02 trillion) in the U.S. to help reduce the trade gap between the two countries.

Southeast Asia - Thu, August 7, 2025 | 12:08 pm GMT+7

Vietnam's leading property developer Novaland to issue 152 mln shares to settle $229 mln debt

Vietnam's leading property developer Novaland to issue 152 mln shares to settle $229 mln debt

Novaland, a major real estate developer in Vietnam, plans to issue nearly 152 million new shares to swap more than VND6 trillion ($228.8 million) worth of bond principal.

Companies - Thu, August 7, 2025 | 10:11 am GMT+7

Vietnam's FDI capital disbursement hits five-year record high despite US tariff turmoil

Vietnam's FDI capital disbursement hits five-year record high despite US tariff turmoil

Disbursed foreign direct investment (FDI) capital in Vietnam reached $13.6 billion in Jan-July, up 8.4% year-on-year, despite U.S. tariff concerns.

Economy - Thu, August 7, 2025 | 9:57 am GMT+7

Malaysia steps up efforts to explore nuclear energy potential

Malaysia steps up efforts to explore nuclear energy potential

Malaysia’s Minister of Science, Technology and Innovation Chang Lih Kang on Wednesday reaffirmed his ministry’s commitment to enhancing cooperation with the Ministry of Energy Transition and Water Transformation (PETRA) in exploring the potential of nuclear energy.

Southeast Asia - Thu, August 7, 2025 | 8:10 am GMT+7

Indonesia's economy grows faster than expected

Indonesia's economy grows faster than expected

Indonesia's economy expanded by 5.12% year-on-year in Q2/2025, up from 4.87% in the previous quarter, exceeding the forecasts of many economic organizations, which had previously projected a rate of less than 5%, according to Statistics Indonesia (BPS).

Southeast Asia - Thu, August 7, 2025 | 8:07 am GMT+7