Hanoi: Apartment Prices Soaring, Buyers Adjust Preferences to Fit Budget

Experts have indicated that, prior to escalating price developments, a number of projects have been pushed beyond their fair value. As a result, buyers are urged to carefully consider the value and reasonableness of a project given the current market conditions.

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A high-rise apartment building in Nam Trung Yen (Nguyen Chanh Street, Cau Giay District). (Photo: Minh Nghia/VNA)

With the rapid and “hot” growth of the apartment segment in Hanoi, experts believe that in the coming time, the market will record a shift in demand to areas with reasonable prices. This means that home buyers are changing their “tastes” to suit their wallets.

Ms. Do Thu Hang, Senior Director of the Consultancy and Research Department, Savills Hanoi, commented that in the face of escalating prices, some projects have been pushed beyond their actual value, so buyers need to carefully consider, weigh the value of use and reasonableness of the project.

According to Ms. Hang, if prices continue to rise, buyers will have to consider the financial equation. While the demand for real housing still accounts for the majority, if prices continue to rise, buyers may consider and choose the option of renting apartments in the inner city or accept moving demand to supply in provinces neighboring Hanoi to have reasonable prices.

Homebuyers with real housing needs can choose from housing in neighboring localities such as Hung Yen or Bac Ninh, the 4th ring road region or the 3.5th ring road. Infrastructure development plays an important role as a lever in changing the value structure of the housing market.

Practical experience shows that infrastructure development will bring the suburban areas “closer” to the city center, reducing travel time. In particular, in neighboring provinces or suburban areas, investors can access land with lower costs, creating a more affordable housing supply.

In the near future, many products in neighboring provinces will increasingly meet Hanoi’s housing needs. Supply in Hung Yen and Bac Ninh will provide about 203,000 apartments from 2024 to 2026.

In addition, the amended laws (Housing Law, Law on Real Estate Business, Land Law) are also expected to facilitate the development of the real estate market, helping to improve the supply to a certain extent. From 2025 onwards, it is estimated that around 84,400 apartments from 101 projects will be launched into the market.

In Hanoi, in the first quarter, the apartment segment continued to lose its supply-demand balance. In particular, the supply of affordable apartments continues to be limited. This has caused the housing needs in Hanoi to continue to be pent-up.

A survey by Savills Company shows that the market continues to record a shortage of products below 30 million VND/m2 (class C). These products represent only 4% of the new supply and have been sold out. Since 2020, the primary supply of class C has decreased by 47% per year.

Ms. Do Thu Hang affirmed that the current supply is mainly focused on class B apartments, accounting for nearly 90%. The supply of class C apartments in the primary market and class A apartments accounts for only a very small percentage. Moreover, from now until the end of the year, although the major laws have been passed, the new supply has not been able to be improved immediately.

Meanwhile, in both large cities such as Hanoi and Ho Chi Minh City, the natural annual demand for housing is about 50,000 houses. This is the result of immigration, people getting married and living alone, and the average number of people in a house decreasing…

This demand has not been met due to limited supply for a period of time, causing a pent-up demand for housing. In addition, macroeconomic factors such as the fluctuating gold market and low interest rates have led investors to look for reasonable and long-term investment channels, which has, in turn, increased the demand for apartments in the Hanoi market – Ms. Do Thu Hang analyzed.

It is noteworthy that buyers are beginning to have a change in psychology. The apartment product line for large cities is now considered an asset rather than the “consumption product” view as before.

Currently, many buyers are gradually realizing that the apartment product line in large cities is also an asset. Even if in the past, the decision to buy an apartment had to be considered for quite a long time because it was also considered a large amount of money, recently homebuyers do not wait too long to make a purchase decision. The purchase decision is now being made faster, and the deposit process is also taking place more quickly.

(Source: Vietnam+)

However, experts say that this is not the story of the entire market. For apartment projects where prices do not go hand in hand with product quality, buyers are unlikely to make a quick decision.

Because transactions in the first quarter show that projects that attract the market’s attention all belong to reputable investors. When launched into the market, the product lines of these investors have a certain guarantee in terms of quality as well as other legal factors.

These investors often use leading brands and consulting units from design to landscape, products, etc. Even in many projects, investors have chosen reputable foreign units to enhance the prestige of the product itself. Good projects, reputable investors, and guaranteed legal status still record positive transaction volumes./.

Thu Hang

SOURCEvietstock
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