Hanoi, HCMC primary condo prices move in opposite directions

Primary prices of condominiums in Hanoi soared in Q1/2024 on high demand from homebuyers, but slid in Ho Chi Minh City, according to major property service firms Savills and CBRE.

In the condo market, the average selling prices of projects in Hanoi’s primary and secondary markets increased rapidly in the first three months of 2024, approaching HCMC price levels.

However, condo prices in HCMC remained stagnant or reduced slightly. At the end of Q1/2024, the primary price of apartments in HCMC remained at VND61 million ($2,436) per square meter (excluding VAT and maintenance fees), down 3% year-on-year. Developers continued to offer attractive purchase and payment options to increase liquidity, a CBRE report says.

Data from Savills Vietnam also show that primary prices of the high-end condo segment in HCMC decreased 1.3% quarter-on-quarter. On the secondary market, old apartments saw their prices go down from the previous quarter.

In contrast to HCMC, Hanoi’s new supply was mostly focused on the high-end segment, driving up condo project prices in the primary market. The average primary price of condos in Hanoi reached VND56 million ($2,236) per sqm (excluding VAT and maintenance fees), up 5% quarter-on-quarter and 19% year-on-year.

The secondary price of condos in Hanoi experienced the highest annual price increase ever recorded in Q1/2024, rising 17% year-on-year and reaching an average of over VND36 million ($1,437) per sqm. Strong growth was observed across districts, particularly in the western area of Hanoi, which has high population density.

The CBRE reports that this quarter has witnessed a significant reduction in the condominium price gap between HCMC and Hanoi in the primary market. It has gone down from 35% to about 10% lower in Hanoi.

According to CBRE, new supply in the first three months of 2024 was limited in both Hanoi and HCMC residential markets.

In particular, Hanoi’s new supply in Q1 was mainly high-end condominium projects in the city's western part, with over 2,300 condos and 30 landed property units, up 11% year-on-year.

However, the new supply is lower than the 3,000-4,000 units launched in the first quarters of 2021 and 2022.

Meanwhile, in HCMC, only 500 condos or so were launched in Q1, mostly from subsequent phases of existing projects launched in 2023. There was only one new project in the high-end segment that launched over 80 units in the south of the city.

HCMC’s new supply in Q1 this year was the lowest in about 15 years at down 17% year-on-year.

One notable bright spot in the primary residential market of both key cities in Q1/2024 was bookings for upcoming projects, CBRE said.

It said that in HCMC, a condominium project on Mai Chi Tho Boulevard in Thu Duc city with an expected asking price of around VND125 million ($4,993) per sqm (equivalent to the luxury segment), saw positive bookings in Q1.

“There is also increasing interest in condominium products in Hanoi. With limited supply in HCMC and the lack of substantial movements in Hanoi's landed property market following the 2021-2022 boom, several investors have shifted their investment focus to condominium projects, particularly in Hanoi,” commented Nguyen Hoai An, senior director of CBRE Vietnam's Hanoi branch.

Dung Duong, CBRE Vietnam executive director, said: “Economic recovery, along with the government's efforts to accelerate implementation of the amended Land Law 2024, have helped strengthen market sentiment of both developers and individual investors.”