Apartment prices in Hanoi are continuing to climb, reaching up to VND100 million ($4,063) per square meter in the city’s west, given thin supply amid the struggling real estate market.
Prices rise at both old and new developments
Data from several real estate researchers and developers showed that apartment supply in Hanoi dropped to a 10-year low in the last quarter of 2023, causing prices to rise. New products could mainly be fond in the mid- and high-end segments.
Apartment prices in Hanoi’s inner-city districts such as Thanh Xuan, Ha Dong, Hoang Mai, and Nam Tu Liem rose 3.5-4.1% year-on-year in Q4/2023, according to a Ministry of Construction report.
Duong Trang, a broker, told The Investor that prices of apartments at the Masteri West Heights project in Nam Tu Liem district are moving in the range of VND60-85 million ($2,437-3,453) per square meter (sq.m), putting them in the high-end segment. A sought-after 80-sqm apartment looking over the lake is being offered at VND6.8 billion ($276,300).
Trang added that apartments at the Masteri Lumiere Evergreen project, also developed by Masterise Homes, are being offered at VND100 million/sq.m. The project, located in the Vinhomes Smart City complex in the west of Hanoi, comprises three 39-storey buildings. It was launched for sale in 2023 and apartments are scheduled to be handed over to clients at end-2025.
Next to the Masteri West Heights, The Canopy Residences apartments, developed by GIC Group, are being launched at VND62-65 million/sq.m.
Apartment prices at projects being developed within the Vinhomes Smart City complex are higher than those in their surroundings. For example, apartments at Moonlight 1 - An Lac Green Symphony (in nearby Hoai Duc district) and Hoang Thanh Pearl (in Nam Tu Liem district) are priced at VND43-58 million/sq.m.
Prices of occupied apartments of the Golden Land buildings in Thanh Xuan district have risen 3.5% to VND38.7 million/sq.m, and those of HH2 Linh Dam in Hoang Mai district have seen their prices climb 3.8% to VND25.7 million/sq.m.
Thin supply and beyond
Le Dinh Chung, CEO of SGO Homes, told The Investor that property developments are booming in both the west and east of Hanoi. In the west, despite an ample land bank, few projects are legally qualified for launch, resulting in low supply, mainly coming from the Vinhomes Smart City complex. Apartment prices have risen dramatically over the past year.
Condos at Lumi Hanoi, developed by CapitaLand in Nam Tu Liem district, are selling at VND70-90 million/sq.m, Chung said. These high prices are due to scant supply and investment in high-end premises.
“Higher condo prices are becoming generalized in Hanoi, but VND100 million/sq.m is higher than the average level, especially as they are located in the west of the city. To be fair, the condos have high quality, enjoy full amenities, and are developed by credible investors,” Chung commented.
He elaborated that thin supply has been driven by legal troubles at both existing and new projects. Rising prices are attributable to low supply, more expensive construction materials, and quality-focused investments.
To ease the situation, Chung suggested that the government should step in, removing legal bottlenecks, particularly at half-finished projects. In addition, more incentives are needed for developing affordable housing with prices below VND25 million/sq.m.
Looking ahead, Chung said that there will be no big changes to housing supply in major cities. Therefore, apartment prices will likely either be flat or increase gradually.
“The Hanoi real estate market boomed in 2020 and 2021 but nosedived in 2022. It began to bottom out and start to recover in 2023, and is unlikely to contract again, but only move sideways or increase slightly,” Chung predicted.