According to a recent survey of several real estate websites, houses in Hanoi alleys are being offered for sale at high prices.
For example, a 30m2 alley house with a 3.5m facade and five floors built on Xa Dan Street, Dong Da District, is being offered for sale at 8.6 billion VND, equivalent to about 286.6 million VND/m2.
Another alley house in Nghia Do Ward, Cau Giay District, with an area of 38m2, is being offered for sale at 6.7 billion VND, equivalent to 176 million VND/m2.
Or an alley house on Kim Giang Street, Dai Kim Ward, Hoang Mai with a 3.5m2 facade, an area of 35m2 and built 4 floors for nearly ten years is being offered for sale at 4.6 billion VND, equivalent to 131 million VND/m2.
The price of alley houses in central Hanoi is fluctuating between 100-300 million VND/m2.
Mr. Tran Quang Trung – Business Development Director of OneHousing said: “Hanoi real estate is on the rise with “dizzying” price increases, I think this is just the beginning of a new cycle”.
The real estate market report for the first quarter of 2024 by Batdongsan.com.vn recorded impressive growth in the Hanoi private house market. In the first quarter of 2024, the private house segment gradually improved in terms of transaction volume and level of interest. Notably, the level of interest improved significantly in some suburban districts. Of which, the level of interest in private houses in Nam Tu Liem district increased by 43%, in Hoang Mai district by 28%, in Dong Da by 21%, in Thanh Xuan by 12%, and in Ha Dong by 26%.
In terms of prices, according to research data from the Vietnam Real Estate Brokers Association (VARS), the prices of detached houses being transacted have increased by 5-15% compared to the end of last year.
It can be seen that, “feeding” on the increasing momentum of the apartment segment, the price of alley houses in Hanoi also increased strongly. Notably, the price range from 100 million VND/m2 to over 200 million VND/m2 of alley houses is much higher than the price of apartment units and comparable to the price of villas and townhouses in this market.
A recent market report released by Savills showed that the primary price of villas and townhouses in Hanoi increased by 3% per quarter to 164 million VND/m2 of land due to new supply entering the market in the first quarter of the year.
Townhouses decreased by 1% per quarter to 192 million VND/m2 of land, while shophouses decreased by 15% per quarter to 279 million VND/m2 of land, mainly due to the new supply of low prices in Thuong Tin District.
According to a field survey, at Hacinco Dai Kim urban area, an adjoining house with an area of 124.5m2 is being offered for sale at 140 million VND/m2, an increase of about 6% compared to last year.
In addition, at Geleximco Le Trong Tan, a 4-storey, 100m2 adjoining house is being offered for sale at 135 million VND/m2.
It can be seen that the price of alley houses is comparable to that of villas and townhouses, and in some districts, the price of alley houses is even slightly higher. However, the attached houses and villas have a large area, so the total amount of money that buyers have to pay is much more than that of houses in the alley.
According to the Vietnam Real Estate Brokers Association (VARS), with the limited supply, the price of primary apartments in Hanoi is “anchoring” high, new projects for sale are all priced in the high-end segment.
Meanwhile, secondary apartments priced around 3 billion VND are only available in districts and towns far from the city center, and are also being sought after and are becoming increasingly scarce. A private house costing around 4 billion VND with an area of 30-40m2 has become an attractive option for many families wishing to settle down.
The real estate market for private houses is forming a new price level as supply continues to fail to meet the demand of investors and residents – especially in the current trend of urbanization.
The price increase is also driven by investment demand. Accordingly, alley houses are considered a type with good liquidity and full legal documents, and the selling price is affordable. Bringing high returns from renting out in the context of increasing demand for renting and buying houses to live in. Especially when the demand for renting retail space in small alleys is also maintaining an increasing trend in recent times when small and medium-sized enterprises plan to reduce their cost burden due to the fact that their main revenue comes from e-commerce platforms.
According to Mr. Nguyen Van Dinh – Chairman of VARS – The price of houses in the inner city area will hardly decrease. People with real housing needs should consider buying a house if they find a product that matches their financial capacity, which means not borrowing too much.
“The history of price increases shows that, like the apartment segment, the price of residential land in Hanoi also recorded a similar increase at the end of 2021, by mid-2022, when the market was difficult, the price of this type decreased but not insignificant compared to the increase, and now it has continued to increase again,” said Mr. Dinh.
Given the price increase momentum of the Hanoi housing market, Mr. Dinh said that investors need to be cautious when considering the price level. Is the value when it is increasing suitable, is it true to the real value? If it is not the real value but is being bubbled, the market is balancing again, the supply will be greater, then it will drop very quickly. In case it is a high value at real value due to increased costs, and increased investment, we must calculate to avoid buying virtual prices.
In addition, the legal issues, and projects formed in the future must be carefully considered in terms of legal, investors, infrastructure, etc. if it is suitable and ensures legal regulations, then participate.
