It is forecasted that in the first half of 2023, the housing market in Hanoi capital will not have much change. However, the supply of housing will continue to be scarce, while the real demand for housing will still increase.
Supply is scarce
The real estate market in 2022 recorded unusual manifestations not only in Hanoi but also across the country, when it was booming at the beginning of the year but quiet at the end of the year. Due to a number of laws that have not been amended and supplemented, plus the tightening of financial policies and corporate bond mobilization, cash flow has been congested, leading to a decline in liquidity.
Although the demand in the market is very large, especially the demand for affordable housing products, while the supply and transactions decrease sharply, there is a paradox that the selling price has not stopped increasing.
According to data reported by the Vietnam Real Estate Brokers Association (VARS), in the fourth quarter of 2022, the Hanoi market had 31 new projects for sale, but of which only 2 projects were completely sold and 29 projects were launched for sale in the second quarter of 2022. next segment, offering a total of 2,030 products mainly high-end products. Eurowindow River Park is a rare apartment project with a price of less than 30 million VND/m2, the absorption rate is about 40% after nearly 2 weeks of opening for sale.
In general, the source of goods in the market is not much, so the projects still maintain the selling price at a high threshold, averaging VND 50 million/m2. In the situation that the land fund in the downtown area is increasingly scarce, 70% of the new apartment supply mainly comes from mega-urban projects in the East and West, such as: Highway 5 Residences, Ha Noi. Noi Melody Residences, Imperia Smart City, Park 1, 2 – Eurowindow River Park, The Zei… The average primary selling price apartment segment is VND50 million/m2, up 10-15% year-on-year, is a segment The most attractive customers thanks to stable growth, rent recovery equal to the time before the Covid-19 epidemic. In central districts such as Ba Dinh, Hoan Kiem, and Dong Da, customers have almost no new choices.
Similarly, real estate products in Thanh Xuan district, Tay Ho recorded up to 400 million VND/m2 but there were almost no transactions. Only the Highway 5 Residences (Gia Lam) project has an absorption rate of up to 90% due to its attractive price and infrastructure support being increasingly improved and modernized by the State.
“Real demand is very strong but transaction volume is not high because the price is too high compared to income, while speculative demand is limited due to rising interest rates and tightening credit. The Hanoi real estate market will not have much change in the next few months. Housing supply continues to be scarce, including in the high-end segment. Selling price will be difficult to increase but also difficult to reduce because input costs are high.
Notably, the market is recording a loss-stopping situation, especially in the land plot segment. The price of secondary land plots in the periphery districts decreased by 15 – 35% compared to the beginning of 2022, the project land also decreased by 8 – 15%. Housing supply is increasingly scarce, especially in the affordable segment,” said VARS Vice President Nguyen Chi Thanh.
Selling prices continue to increase?
According to market report data from VARS, the supply of new apartments in Hanoi at this time is the lowest in the past 8 years, but the average primary selling price is still increasing compared to the previous year, reaching nearly 47 million VND/m2. . Since 2018, the primary price has increased by 11%/year on average, the secondary price has increased by 5%/year and recorded the difference between the primary and secondary selling prices up to 42%, the highest in Grade A projects. (52%), Grade B (27%) and Grade C (25%).
“In Hanoi, the bright spot is the East region when infrastructure planning is increasingly developed, housing projects are invested synchronously, many utilities … meet the needs of the people. From a short-term perspective, the affordable and mid-end segments will be interested and strongly developed because this is a segment that always has high demand in the market. In the first half of 2023, there will still be an upward trend in selling prices for residential real estate,” said VARS Vice President Nguyen Chi Thanh.
Sharing the same view, Vice Chairman of the Vietnam Real Estate Association Nguyen Manh Ha said that housing products, especially affordable apartments, have continued to increase sharply in 2022, in Ha Dong, Nam Tu Liem and Hoang Mai districts. .. exceeding 30 million VND/m2, it is not uncommon for projects to sell for over 40 million VND/m2. Therefore, in 2023, apartment prices will hardly decrease but will stay flat, maintaining the current price level.
“Due to the long time for legal appraisal and completion of project licensing documents, the project was overpriced. It is difficult for the projects to be opened for sale later, at a lower price than the previous projects of the same segment. Therefore, if the supply is still blocked and the credit flow has not been cleared, the primary selling price will be difficult to reduce,” said Mr. Nguyen Manh Ha.
Meanwhile, according to General Director of Cushman & Wakefield Vietnam Trang Bui, thanks to the ability to connect infrastructure, in the coming time, the tendency to buy houses of people in Hanoi will move to satellite cities, especially especially in the eastern area where it borders large industrial areas such as Hung Yen, Bac Ninh…
“The Hanoi housing market will have notable trends, including: Social housing is focused to meet the great needs of workers, employees and low-income people; easier payment method, high discount for fast payments (from 9 – 13%) or attractive incentive program to boost market demand.
Besides, the trend of focusing on parking investment when this becomes one of the important decision-making factors for buyers, projects with large parking space will attract more customers. Finally, the multi-generational apartment design trend is inspired by Asian culture, multi-generational products and designs are especially popular,” said Cushman & Wakefield Vietnam General Director Trang Bui.