Hanoi surpasses HCMC in apartment absorption in Q1: Savills

Despite high prices, Hanoi recorded 7,914 apartment sales in the first quarter of 2025, significantly more than in Ho Chi Minh City, according to consultancy Savills Vietnam.

Savills’ Q1 real estate market report showed that Hanoi’s apartment segment experienced a decline in both new supply and sales volume.

Specifically, new supply dropped 39% quarter-on-quarter but surged 95% year-on-year to 7,940 units, with an absorption rate of 84%.

The total primary supply reached 11,168 units, marking a 33% decrease quarter-on-quarter and a 14% drop year-on-year.

Sales totaled 7,914 units, a 41% decline from the previous quarter but a 49% increase year-on-year. Grade B apartments accounted for 99% of all units sold.

The average primary price rose to VND79 million ($3,050) per square meter, up 5% from the previous quarter and 32% from a year earlier.

Three mega-urban projects - Vinhomes Ocean Park, Vinhomes Smart City, and Vinhomes Global Gate - contributed 89% of new supply and 90% of total sales during the quarter.

Their strong performance reflects continued demand for large-scale developments offering extensive amenities such as shopping centers, sports facilities, schools, and hospitals - features that help offset their relatively remote locations.

Savills projected that approximately 7,400 new units will enter Hanoi’s market in 2025, with Grade B apartments expected to continue dominating at 67% of the total. From 2026 onward, around 80,900 apartments from 99 projects are expected to launch, with Hoai Duc, Dong Anh, and Hoang Mai districts contributing 52% of the future market share.

Do Thu Hang, an expert from Savills Hanoi, noted that the market remains structurally imbalanced, with no inventory priced below VND2 billion ($77,310).

In Q1, about half of all primary apartment transactions were in the VND2-4 billion range, while the remainder exceeded VND4 billion.

Elevated housing prices continue to challenge homebuyers with real residential needs, especially those with limited financial capacity. Even with bank financing or other leverage options, buying homes in the city center remains difficult.

"As affordability decreases, we're seeing a growing trend of buyers shifting their focus to suburban areas," Hang added.

HCMC registers just 800 new units in Q1

In Ho Chi Minh City, the apartment market saw a modest 800 new units launched in Q1, a 70% drop quarter-on-quarter, though still a 29% increase year-on-year.

More than half of this new supply came from subsequent phases of large-scale projects in Thu Duc city and Binh Tan district, with only one new project, The 9 Stellars-Alta Heights in Thu Duc. All new supply belonged to grades B and C.

Affordable housing remained scarce, with only 13% of new Grade C units priced below VND50 million ($1,933) per sqm, all from the second phase of the Green Town project in Binh Tan.

With limited new supply and some ongoing project delays, primary supply dropped 24% quarter-on-quarter but edged up 2% year-on-year to about 5,000 units. Sales fell 46% quarter-on-quarter to just 1,400 units.

Compared to the same period over the past two years, however, market activity showed signs of improvement, driven by extended payment plans and loan assistance programs.

Despite strong demand, Savills analysts noted that it remains largely unmet, as reflected in a low absorption rate of just 23% for unsold inventory. In contrast, newly launched projects achieved a more robust 61% absorption rate.

With Thu Duc city's master plan officially approved in January, supply is expected to improve by 2040. High-rise housing aligned with transit-oriented development (TOD) is being encouraged, supported by high land-use ratios. New developments will focus primarily on the areas of Thu Thiem, Truong Tho, Long Binh, and Long Truong.

Local authorities have also taken steps to resolve legal bottlenecks in the housing market, leading to progress in project approvals, construction permits, sale contracts, and the issuance of land use rights certificates (commonly known as "pink books").

Looking ahead, new supply in HCMC is expected to remain limited for the rest of the year, totaling nearly 7,000 units. About 90% of this will come from later phases of seven existing projects, while only four new developments are projected to launch, accounting for just 10% of the supply.

Giang Huynh, a Savills HCMC expert, noted that liquidity remained low in Q1 due to limited new supply and market disruptions caused by two long holiday periods. "With fewer options and minimal new launches, the market lacked momentum," she said. "However, pricing remained stable."

Compared to Q1/2024, transaction volumes have improved. Newly launched projects recorded absorption rates of around 60%, outperforming the market average. This trend highlights growing buyer interest in legally transparent projects from reputable developers with strong infrastructure potential.

“While legal challenges previously plagued many projects, today's buyers are more cautious and selective. They’re taking more time to evaluate before making decisions,” Giang added. “As a result, developers must now ensure full legal compliance before launching and signing contracts.”

Regarding price growth, Giang noted that Grade B apartments saw the strongest performance in both pricing and liquidity. This segment currently dominates the market, with many well-received projects upon launch.