Record-breaking transaction volumes in the last 3-5 years
The strong price appreciation of Hanoi apartments in both the primary and secondary markets has caused many investors and end-users to pivot towards purchasing residential land. This shift has resulted in an increase in both prices and transactions.
Ms. Trang (Hoang Mai, Hanoi) recently sold her 41-square-meter house for VND 4 billion. “I had wanted to sell since the end of last year, initially listing it at VND 3.6 billion. Many people came to view the property but complained about its feng shui and tried to lowball me. I didn’t agree with their offered price and held firm. At the beginning of this year, as apartment prices surged, so did the prices of houses in alleys. I relisted the property at VND 4.2 billion. After negotiations, I agreed to a VND 200 million discount and finalized the sale at VND 4 billion.”
According to Batdongsan.com.vn data, there has been an improvement in the level of interest and transaction volume for detached houses. 39% of surveyed real estate agents reported stable transaction volumes for detached houses, while 17% revealed a 10%-50% increase in transactions during the first quarter of this year. Compared to the same period in 2023, the demand for detached houses has increased by 3%-24%, depending on the price range, with the majority of demand concentrated in the VND 2-4 billion segment.
The report by the Hanoi Real Estate Brokerage Association (VARS) also noted that the real estate market for residential land remains vibrant, with an increasing number of customers looking to purchase. The most sought-after properties are those that cater to end-users, with selling prices ranging from VND 3-5 billion in the city center and around VND 2 billion in the outskirts. Selling prices have increased by 5-15% compared to the end of last year. In the outskirts of Hanoi, particularly in areas close to industrial zones, prices have risen by 10-20%.
“While the price increases in these areas may exhibit abnormal signs, it is undeniable that the high level of interest and transaction volume is genuine,” the association stated.
Several distributors in this segment have reported that the first quarter of 2024 witnessed record-breaking transaction volumes, the highest in the last 3-5 years.
Prices of houses in alleys are unlikely to decrease
The report on Hanoi’s residential land market for the first quarter of 2024, published by the Research Center for Market and Customer Understanding (OneHousing), revealed that transactions for residential land in Hanoi reached 9,800 units, with 44% of those transactions involving properties priced below VND 5 billion. Specifically, the number of transactions in March 2024 reached nearly 5,000 units, a 153% increase compared to February 2024 and a 38% increase compared to December 2023. These figures indicate a revival in the residential land market after the Tet holiday.
The transactions in March 2024 mainly involved houses in alleys located in outlying districts such as Bac Tu Liem, Nam Tu Liem, Ha Dong, and Long Bien. The number of transactions in these outlying districts increased by 176% compared to February 2024. Transactions in the central districts also doubled compared to the previous month, mainly in Hai Ba Trung, Ba Dinh, and Dong Da districts.
The total number of transactions for houses in alleys in the first quarter of 2024 reached approximately 9,000 units, with 92% of those transactions occurring in outlying areas, as the average price in these areas is only about 50% of the prices in the central districts.
The district that witnessed the most significant increase in transaction volume in March 2024 compared to February 2024 was Bac Tu Liem, with a staggering 237% increase, mainly in Xuan Dinh, Thach Ban, and Phu Dien wards. This was followed by Nam Tu Liem with a 205% increase, concentrated in Tay Mo, Dai Mo, and My Dinh 1 wards, and Long Bien with a 204% increase, focused on Thach Ban, Long Bien, and Ngoc Thuy wards.
Land prices for houses in alleys have been on an upward trend, with an average increase of 2.9%-8% (compared to the same period in previous years) from 2020 to the present. In the first quarter of 2024, the price of houses in alleys reached approximately VND 170 million per square meter in the city center and nearly VND 100 million per square meter in outlying areas.
Commenting on the increase in transactions for residential land in alleys, Mr. Tran Quang Trung, Director of Business Development at OneHousing, stated that this segment is affordable for customers who prefer a secure and stable option and those who are accustomed to living in ground-level houses.
In terms of risk for customers and investors, there are minimal risks associated with residential land. Investors should focus on choosing the right district and area and consider security aspects. For instance, it is advisable to avoid houses in alleys that are too narrow or deep, as this may pose challenges for emergency services like fire trucks. Additionally, it is essential to pay attention to security, safety, and the availability of amenities.
Assessing this segment, VARS stated: “Prices of houses in the inner city are unlikely to decrease. End-users with a genuine need for housing should consider purchasing if they find a suitable property within their financial capabilities.”
