The average price of new apartments in Hanoi has reached $2,502 per sqm – rising for five consecutive years and unlikely to decrease in the near future – Photo: Van Duan
This was one of the issues discussed by experts at the Seminar “Real Estate Cashflow – Apartment Segment Leading the Hanoi Market in 2024” organized by the Construction Newspaper on the afternoon of April 24 in Hanoi.
According to reports from market research firms, apartment prices in Hanoi have continuously set new price levels in recent years. As of Q1-2024, new apartment prices have reached an average of $2,502 per sqm, growing for five consecutive years (21 consecutive quarters).
The selling price in the secondary market of Hanoi apartments in Q1 recorded the highest year-on-year price increase ever, up 17% compared to the same period last year and averaging over $1,522 per sqm.
Economic and real estate experts at the seminar
Market research firm CBRE’s Q1-2024 real estate market outlook report noted that in the first three months of 2024, new supply in Hanoi was mainly concentrated in high-end condominium projects in the west, with a total of over 2,300 apartments and 30 low-rise houses recorded as newly launched in the quarter.
Compared to the same period in 2023, the supply of new apartments for sale in Hanoi in Q1-2024 increased by 11%. However, this figure has still not recovered to the level of 3,000 – 4,000 new apartments launched in the first quarter of 2021 and 2022.
CBRE forecasts that for the whole of 2024, Hanoi will record an additional 12,000 newly launched apartments, up nearly 20% compared to 2023. The new supply will continue to focus on the high-end segment, leading to primary prices in Hanoi in 2024 remaining high and potentially increasing by 10% year-on-year.
Meanwhile, the secondary selling prices of apartments are expected to gradually stabilize after a period of two years of fluctuations due to the more abundant new supply in the coming quarters.
Shark Hung, Vice Chairman of CEN Group’s Board of Directors, believes that apartment prices are currently quite balanced compared to supply and demand. It is highly unlikely that apartment prices will decrease in the near future.
At the seminar, “Shark Hung” – Mr. Pham Thanh Hung, Vice Chairman of CEN Group’s Board of Directors, said that at this time, everyone can feel the quite dramatic price increase of apartment buildings, especially in Hanoi.
Mr. Hung believes that this is a necessary adjustment because for a long time, the real estate market has faced many difficulties in terms of supply, legal issues, and overall market conditions, causing investors to face a surplus of cash flow.
“According to a report in Q1-2024, the total amount of money in commercial banks is 18 million billion VND. However, people in need of money are unable to borrow more because they have run out of collateral. People who can borrow do not have a need because they do not know what to borrow for. This is a consequence,” said Mr. Hung.
Along with the surplus of credit, bank lending rates for real estate have also fallen to an unprecedented low of only 5-6%. This is the lowest interest rate in history in nearly 30 years. That is the reason why investing in real estate businesses has created positive cash flow and attracted investors.
When asked whether apartments will continue to increase or will decrease, “Shark Hung” said that there are not many other products to replace real estate investments at the moment. The increase in apartment prices is mainly due to the increase in land prices. “I think that apartment prices are currently quite balanced compared to supply and demand. If there is a further increase in prices, there will be an adjustment, but I don’t think that apartment prices will decrease,” said Mr. Hung.
