Affordable Housing Gets an Upgrade: Are Skyrocketing Prices Justified?

From Affordable to Premium: The Rising Prices of Hanoi’s Real Estate

According to reports by CBRE and One Mount, as of Q2 2025, the average primary apartment selling price in Hanoi reached approximately 79 million VND per square meter of net area (excluding VAT, KPBT, and discounts), a 6% increase from the previous quarter and a 33% surge compared to the same period in 2024.

Savills Vietnam recorded an even higher price of 91 million VND per square meter, representing a 40% year-on-year increase. The market is almost devoid of primary products below 2 billion VND per unit, while 67% of new supply is priced above 4 billion VND.

Notably, the price increase is not limited to new projects but has also spread to many former affordable projects. Specifically:

Source: Batdongsan.com.vn

The story of Ms. Ly (Xuan Dinh, Bac Tu Liem, old) is a typical example. In 2015, she purchased an apartment of nearly 79 square meters for almost 24 million VND per square meter at the NO4 tower of the Ngoai Giao Doan complex. Years later, when she tried to sell it, she was offered only 25 million VND per square meter, so she decided not to sell. However, in the past five years, as the prices of new apartments in the surrounding area reached 80-90 million VND per square meter, her apartment is now worth 3.5 times what she paid for it.

According to Ms. Ly, not only do these older apartments hold their value, but they are also considered assets for investment, providing rental income and potential for appreciation due to infrastructure development and new surrounding projects.

In reality, some areas in Hanoi, once known as “heaven for affordable housing,” now have 5- to 10-year-old apartment projects with resale prices ranging from 45 to 55 million VND per square meter.

The traditional classification of Hanoi’s apartment market into three groups: affordable (below 30 million VND per square meter), mid-range (30-45 million VND per square meter), and high-end (above 45 million VND per square meter), is becoming obsolete as prices rise rapidly, outpacing the actual quality of the apartments.

The Ministry of Construction also acknowledged the formation of a new price level across all segments. Specifically, the affordable segment, previously priced below 30 million VND per square meter, has now increased to 45 million VND per square meter. The mid-range segment, previously priced at 30-45 million VND per square meter, has risen to 45-70 million VND per square meter. The high-end segment, once priced at 50-70 million VND per square meter, has climbed to 70-100 million VND per square meter. The ultra-luxury segment has emerged in the market, with a few projects priced above 200 million VND per square meter.

Are They Truly “Premium”? A Question of Quality Amid Rising Prices

After more than a decade, many projects initially positioned as affordable now boast prices on par with or even surpassing those of newly launched premium apartments. However, the prices do not accurately reflect the quality of these projects.

In reality, the amenities and infrastructure within these projects have not changed significantly since their delivery. In some cases, the facilities have deteriorated, and the maintenance fees have not been utilized effectively.

A real estate expert commented on projects from 2017 that were launched at prices of 18-22 million VND per square meter but are now being resold by owners at double or triple the original price. Meanwhile, the design, amenities, and population density remain basic. “They are labeled as premium solely because of the price, while the quality remains unchanged,” the expert remarked.

The extremely high price levels are shrinking the pool of genuine homebuyers, while the majority of transactions are driven by infrastructure-anticipating investors. Without aggressive policies to promote the development of social and affordable commercial housing, the dream of owning an apartment will remain out of reach for most urban residents.

Ms. Do Thu Hang, Senior Director of Consulting and Research, Savills Hanoi

The downside of this trend is that genuine homebuyers face significant challenges. A budget of 1.8 to 2.2 billion VND, which used to be sufficient for a two-bedroom apartment in the outskirts, now only affords a one-bedroom unit or a project with legal entanglements. In the mid-range segment, a two-bedroom apartment now starts at 3.5 billion VND, while a high-end option surpasses 8 billion VND.

The current prices are not only unaffordable for low-income groups but also out of reach for those in the upper-middle-income bracket. According to feedback from real estate brokers who are members of the Vietnam Real Estate Brokers Association (VARS), many young buyers, despite having good incomes of 40-50 million VND per month, are reluctant to purchase property without financial support from their families.