Apartment Consumption in 2024 Expected to be the Highest in 4 Years
According to the OneHousing Market Research and Customer Insight Center, in the first half of 2024, the Hanoi market recorded more than 52,000 transactions, of which apartments (both primary and secondary) accounted for 54%.
New supply, transaction volume, and unit prices are all on the rise, indicating that the Hanoi market has moved past the recovery phase and entered a period of strong growth. Specifically, Hanoi’s primary supply in Q2 2024 increased for the fifth consecutive quarter, reaching 8,400 units, a 97% increase from the previous quarter and a 340% year-on-year increase. Favorable macroeconomic factors and the consecutive launch of new projects have driven the Q2 supply to its highest level since 2020.
Apartment transactions increased in both volume and selling prices. Specifically, compared to Q1 2024, the number of transactions in Q2 2024 increased by 49%, and the average unit price increased by 21%.
OneHousing’s research shows that in the period of 2024 – 2025, the Hanoi apartment market is expected to introduce and absorb approximately 22,000-23,000 units annually. The supply and consumption in Hanoi during this period are forecasted to surpass the figures from 2020 to 2022 and will be the highest in the last four years.
The new apartment supply in Q2 mainly came from the luxury and ultra-luxury segments, accounting for 97% of the total market. The absence of new affordable housing and the minimal presence of mid-range options (~3%) indicate that the market has entered a new phase, with luxury and ultra-luxury segments dominating the market supply.
Future supply is expected to come largely from the eastern and western regions of Hanoi, where new subdivisions and projects are being developed on a large scale.
Ho Chi Minh City Apartment Prices Hit a Record High in Q2
Lagging slightly behind the Hanoi market, the Ho Chi Minh City apartment market is anticipated to enter a recovery phase in the period of 2024 – 2025, with supply and consumption forecasted to surpass the figures from 2023.
Specifically, in the first half of 2024, Ho Chi Minh City recorded a 132.5% increase in new apartment supply in Q2 compared to the previous quarter. Experts predict that in 2024 – 2025, the Ho Chi Minh City market will recover with an annual supply of 8,000 – 10,000 units.
The luxury segment is leading the Ho Chi Minh City apartment market in the first half of 2024, accounting for 54% of new supply, with new projects mainly located in the eastern part of the city.
Notably, the average primary selling price in Ho Chi Minh City in Q2 2024 reached a record high of VND 76.7 million/sqm, a 6% increase compared to the same period last year. Despite the high prices, consumption in Q2 2024 still increased by 7.3% year-on-year to 1,600 units, higher than the new supply (~1,200 units). The consumption of luxury and ultra-luxury apartments accounted for 80% of the total.
Mr. Tran Minh Tien, Director of the OneHousing Market Research and Customer Insight Center, believes that the positive macroeconomic indicators and the upcoming enactment of the three amended Real Estate Laws will lay the foundation for the continued growth of the apartment market in Hanoi and Ho Chi Minh City in the second half of 2024 and beyond.
Regarding the Hanoi market, the Q2 figures indicate that the apartment market has strongly recovered after five consecutive quarters of growth, and the market is entering a new growth phase. Meanwhile, the Ho Chi Minh City real estate market is expected to begin its recovery in 2024-2025 as legal issues surrounding projects are gradually resolved and new apartment supply increases compared to 2023. The luxury and ultra-luxury segments will dominate new apartment supply in both markets. Well-planned large-scale urban areas and reputable developers with strong financial capabilities will have the opportunity to dominate the market in the coming years.
