What’s Next for Hanoi’s Apartment Prices?

The Ministry of Construction’s report on housing and the real estate market for Q1 2025 noted that apartment prices remained stable during this quarter, no longer surging as they did in 2024. The affordable segment is priced below VND 45 million/m2, the mid-range segment fluctuates between VND 45-70 million/m2, high-end apartments range from VND 70-100 million/m2, and the ultra-luxury segment can reach nearly VND 200 million/m2.

Although it has cooled down, Hanoi apartment prices remain high. Currently, primary apartment prices in Hanoi reach approximately VND 75 million/m2 (excluding VAT and maintenance fees), a slight increase from the last quarter of last year, according to CBRE data.

Savills Vietnam’s report also revealed that the Hanoi apartment market experienced an unprecedented phase, continuously surging for eight consecutive quarters from Q2 2023 before slowing down in Q1 2025. By the end of Q4 2024, primary apartment prices in Hanoi averaged VND 79 million/m2, with an average increase of 22%.

However, according to a survey of over 400 projects by Savills, the secondary market witnessed a noticeable stagnation, with the average secondary apartment price (resale) in Q1 2025 at around VND 60 million/m2, a 1% decrease quarter-on-quarter depending on the project. Some apartments even experienced significant price reductions but found no buyers.

A survey of the current market reveals that advertised apartment prices remain predominantly above VND 50 million/m2, with almost no affordable apartments priced below VND 45 million/m2.

The topic of rising Hanoi apartment prices has been controversial since 2023. Some attribute it to limited supply, high demand, and potential “price leadership.” A Hanoi-based real estate brokerage firm leader commented, “In a market with scarce supply and high demand due to years of suppression, especially with 90% of the supply controlled by a group of investors, the market will be led, and customers will find it hard to get better deals.”

Commenting on the outlook for Hanoi apartment prices, Mr. Pham Duc Toan, CEO of EZ Property, opined that while inner-city apartments in prime locations might see increases, other areas couldn’t sustain further price hikes as they had already exceeded buyers’ affordability thresholds.

Mr. Toan cited three reasons for the anticipated price decline. First, there will be a substantial increase in apartment supply, especially with Hanoi’s recent approval of 148 projects spanning over 840 hectares as pilot commercial housing projects through negotiated land use rights. These projects will boost the market’s supply during the 2026-2030 period.

Second, the renovation of old apartment buildings in the inner city will create a relatively large supply. While this may not increase the population, some commercial or mixed-use buildings will offer residential units like officetel and condotel, despite legal restrictions on long-term residence.

Third, social housing is set to be a significant breakthrough. Instead of constructing a few buildings in each area, as was previously the case, large-scale developments spanning dozens of hectares will be undertaken. For instance, the Tien Duong 1 and Tien Duong 2 social housing areas in Dong Anh District cover nearly 30 hectares. Therefore, the upcoming surge in social housing supply will be substantial enough to meet the demand for affordable housing.

“If we don’t focus our efforts on developing social housing now, a large portion of the population will be unable to afford homes in the city,” Mr. Toan emphasized.

Sharing this view, Mr. Nguyen Anh Que, Chairman of G6 Group, forecasted that Hanoi apartment prices would stabilize until the end of 2025 and then enter a prolonged downward cycle, with the bottom occurring in the 2028-2030 period, coinciding with a significant increase in social housing supply.

According to Mr. Que, Hanoi apartment prices are expected to decrease by 10-30% from their peak in Q4 2024, with variations depending on location. Specifically, within Ring Road 2, prices may hold steady or even witness slight increases due to limited land availability and the absence of social housing supply.

In the area between Ring Road 2 and Ring Road 3, apartment prices are projected to soften by 10-15% due to the presence but limited availability of social housing.

Beyond Ring Road 3, apartment prices could witness a more pronounced decline of 10-30% due to the development of large-scale social housing projects, which help decongest the urban population. This directly competes with the currently expensive apartments, priced at VND 20-25 million/m2.