The Ultimate Guide to Apartment Prices: Experts Predict a Surprising Shift in 2024’s Second Half.

Contrasting Supply Trends in Hanoi and Ho Chi Minh City

The first half of the year witnessed contrasting trends in housing supply between Hanoi and Ho Chi Minh City, especially in the apartment sector.

In Hanoi, new supply launched in the second quarter surged nearly fourfold from the previous quarter, reaching approximately 8,500 units. For the first six months of the year, the total new supply of apartments in Hanoi exceeded 10,840 units from 17 projects. This also marked the highest mid-year supply recorded since 2020. The majority of new supply continued to concentrate in the West, mainly from two projects: Lumi Hanoi (phase 1) and Imperia Sola Park.

On the other hand, Ho Chi Minh City witnessed the addition of nearly 1,200 new apartments in the second quarter, following a mere 500 units in the first quarter. These new apartments were located in the eastern and southern districts of the city. Most of the apartments sold in the first half were from existing projects offering new phases, except for two entirely new projects: The Aurora in Phu My Hung (82 units) and Eaton Park (841 units) in District 2.

Buoyed by the abundant new supply, Hanoi’s apartment market witnessed a significant surge in sales, with the number of units sold in the first half of 2024 surpassing the total for the entire year of 2023. Specifically, 10,170 units were sold in the second quarter alone, five times the number sold in the previous quarter and the same period last year.

Apartment projects in large townships in the West and East of Hanoi continued to record strong sales performance. Notably, some projects with a large number of units (1,000 – 2,000 units) achieved sales of 80-90% during this quarter. Meanwhile, a project in the West quickly proceeded with the second phase of sales after officially launching the first phase in the second quarter. In terms of product type, smaller units, such as studios and one-bedroom apartments, which are more affordable and suitable for renting, recorded healthy liquidity in the market.

In Ho Chi Minh City, with new apartment supply still limited in the first half (only 40% of the same period last year), the number of apartments sold during this period reached 80% of the previous year, totaling over 1,700 units. It is evident that due to the limited new supply, projects with new launches in Ho Chi Minh City during the first six months achieved good sales performance.

A mid-range project in the South of the city, offered at an average price of VND 53 million/sqm (excluding VAT, maintenance fees, and promotions), 16% lower than the Ho Chi Minh City market average, recorded sales of over 90% on the launch day.

In the Eastern district, a luxury apartment project recorded the sale of its remaining units in the final phase at an average price of VND 170 million/sqm during the launch day. Simultaneously, a high-end project bordering the luxury segment, launched in the same month, recorded sales of more than 70% of its units at an average price of approximately VND 130 million/sqm (excluding VAT, maintenance fees, and promotions).

Hanoi’s Apartment Prices Approaching Ho Chi Minh City’s

The selling price of apartments in Hanoi is gradually catching up with Ho Chi Minh City, in both the primary and secondary markets.

In the primary market, Hanoi’s average apartment selling price reached approximately VND 60 million/sqm (excluding VAT, maintenance fees, and promotions), only VND 3 million lower than Ho Chi Minh City’s current average. Compared to the previous quarter, prices increased by 6.5% and nearly 25% year-on-year. The new supply of luxury apartments still accounts for a large proportion, along with the strong presence of southern investors, keeping Hanoi’s primary apartment prices high.

Additionally, the completed and handed-over apartment fund over the past 1-2 years has only reached about 15-20,000 units, not yet abundant compared to the 2019-2020 period when the number of handed-over units reached 30-40,000 units/year, while housing demand continues to rise, further driving up primary selling prices.

In the secondary market, after a period of hot growth in the first quarter, price increases slowed in the second quarter, with a 5% quarterly increase and a 22% year-on-year increase. The average secondary selling price of apartments in Hanoi was approximately VND 38 million/sqm (excluding VAT and maintenance fees). The increasing primary supply has led to a more stable secondary price level.

In Ho Chi Minh City, primary market prices continued their mild upward trend, increasing by about 3% quarterly and 6% year-on-year, reaching over VND 63 million/sqm. In the second quarter alone, more than 70% of new supply (from two projects by foreign investors) was located near the city center and positioned as luxury or high-end projects. Their primary prices were two to three times higher than the market average. In contrast, during the same period last year, most new supply was located far from the city center and positioned in the mid-range to high-end segments. Additionally, some projects located in the city center, launched 5-7 years ago, released a small number of remaining units at prices nearly double those of the previous launch.

With price increases in the primary market and projects adjusting primary prices higher than those of previous phases, Ho Chi Minh City’s secondary apartment market also recorded a 4% quarterly increase and a 3% year-on-year increase. Areas far from the city center, with a large supply of apartments, witnessed a price correction in the past, but secondary asking prices increased by 2-3% year-on-year due to positive news about project completion, the inauguration of new utilities, and infrastructure improvements in the surrounding areas during the second quarter.

Apartment Price Forecast for the Second Half of the Year

Ms. Nguyen Hoai An, Senior Director of CBRE Hanoi, forecasts that from now until the end of 2024, with the continued increase in primary supply, the upward trend of secondary selling prices is expected to slow down, with prices at the end of 2024 expected to increase by about 22% year-on-year.

In Ho Chi Minh City, with more than 8,000 new apartments expected to be launched in 2024, primary apartment prices are projected to increase by about 5% year-on-year, narrowing the price gap between Hanoi and Ho Chi Minh City.