Market Interest Levels Rise
According to the latest data from Property Guru Vietnam, in July 2024, Hanoi’s condo market continued to assert its leading position in the growth of the entire real estate market. This was evident through a roughly 2.4% increase in market interest, while listings also saw a corresponding 6% rise. This development not only signals optimism for the market but also indicates that consumers are paying increasing attention to real estate projects in this area.
In the overall growth of Hanoi’s real estate market, the city’s condo sector remains the leading segment. Specifically, interest in Hanoi’s condo market rose by 6%, and listings increased by the same percentage.
Notably, other segments and property types also witnessed growth in both interest and listings.
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Compared to the previous month, in the buying and selling market, interest in Hanoi’s private homes increased by 4%, and listings rose by 8%. Interest in Hanoi’s land lots rose by 3%, with listings increasing by 5%, while interest in the city’s villas rose by 2%, and listings by 4%. Similar figures were observed for Hanoi’s shophouses, with a 1% and 4% increase in interest and listings, respectively.
In the rental market, interest surged across multiple property types. Condos and room rentals were the two segments that witnessed the most significant growth in interest, with increases of 15% and 10%, respectively. Other property types also saw an increase in interest, with private homes and shophouses recording a 3% and 2% rise in interest, respectively.
Regarding rental listings, condos saw a 7% increase, offices rose by 13%, private homes by 5%, and villas by a substantial 15%. Cau Giay, Hoai Duc, and Dong Da districts stood out with notable interest increases of 11%, 20%, and 13%, respectively.
Anticipating a “New Cycle” to Improve Supply
In the first half of 2024, residential segments remained the real estate market’s hot spots. The condo segment, in particular, witnessed a surge in interest, leading to a significant rise in secondary market prices.
Especially noteworthy was the robust growth in condo prices, with some luxury condo projects recording average increases of VND 150-250 million per unit within a short period.
One of the primary reasons for this situation is the high demand coupled with a scarce supply of new developments. This scenario is not unique to the condo segment but also extends to other market segments, such as land lots and private homes.
Ms. Do Thi Thu Hang, Senior Director of Consulting and Research at Savills Hanoi, shared her insights: “Compared to the same period last year, secondary market condo prices have increased by an average of 25%, with segments B and C witnessing even higher increases of 27% to 29%.”
The restriction on supply and the imbalance in product availability are considered the main reasons for the continuous surge in condo prices. In Q2 2024, new supply decreased by 34% quarter-on-quarter and 25% year-on-year, with 2,697 units. Primary supply stood at 10,317 units, a decrease of 20% quarter-on-quarter and 49% year-on-year.
The majority of condo purchases recorded in the first six months belonged to segment B. This segment accounted for 96% of the total 5,085 units sold. Segment B provides a good balance between the cost of living and quality of life, offering essential daily services that meet buyers’ needs.
According to Ms. Hang, Hanoi’s housing market is expected to enter a “new cycle” due to the early enforcement of the Land Law, Housing Law, and Real Estate Business Law, effective from August 1: “With the early enforcement of these laws, many market issues will be addressed, and the impacts will be faster. For instance, the issue of limited supply in many localities. When supply is restricted, consumers have fewer choices, leading to unstable and rising prices. Addressing the issue of limited supply will positively impact the overall market.”
However, it is essential to note that even with the early enforcement of these laws, it will take time to resolve the limitations on supply as projects are currently awaiting guiding documents.
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