Are Apartments and Townhouses in Hanoi Really Hot or Just Hype?
After a slump of nearly 2 years, the real estate market for apartments and townhouses in the inner districts of Hanoi has unexpectedly heated up again.
Soaring Demand
Real estate broker Mr. Le Van, who specializes in properties in central districts such as Hai Ba Trung, Dong Da, and Hoan Kiem, recently revealed that he received a deposit from a buyer for a 3-story townhouse in the Kham Thien area (Dong Da district). The property, measuring only 30 square meters, was sold for VND 3.2 billion. Located in a small alley that can accommodate only 2 motorcycles passing each other, the townhouse attracted significant interest.
Other brokers confirmed that many people are now looking to buy properties in the alleys of the inner districts of Hanoi, as prices for apartments have remained high despite the market slowdown. Ms. Thu Quynh, a resident of Cau Giay district, stated that instead of spending money on a new apartment in the Tây Mỗ and Nam Từ Liêm areas, which can cost up to VND 4 billion, her family decided to purchase a townhouse in a deep alley of Hai Ba Trung district. The house measures 28 square meters and was bought for VND 3.5 billion. Ms. Quynh explained that even though living in an alley can be inconvenient, with limited car access and old construction, the location in the city center makes commuting and taking their child to school much more convenient.
In an interview with a reporter from Người Lao Động newspaper, Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn, shared statistics showing that the demand for residential properties in Hanoi has been increasing. In February 2024, the search volume for landed properties increased by 19.7% compared to January 2024, with a focus on properties priced between VND 2-5 billion in the inner districts.
Apartment Market Slump Due to Continuous Price Hikes
Similar to the demand for landed properties, many people are showing interest in the apartment market in Hanoi, especially in the current context of low savings interest rates and attractive home-buying loan packages offered by banks. However, the apartment market has surprised many people. Real estate broker Mr. D.T.V. from Phu Tai Land brokerage floor stated that continuous price increases have made customers hesitant. Although many customers inquire about buying an apartment, the price hikes imposed by developers often impact the transactions negatively.
Mr. Thang, another real estate broker specializing in apartments in Hanoi, shared that since the Lunar New Year, he has only managed to sell 2 apartments despite receiving many inquiries. He explained that while there is a high level of interest from potential buyers, many cannot afford the high prices of the apartments. Therefore, they are waiting to see if prices will cool down in the near future.
A representative from a notary office in Bac Tu Liem district revealed that, on average, they handle about 5 real estate transactions per day, including only 1-2 apartment sales. “The market is not as vibrant as rumored,” said one notary.
According to the Vietnam Real Estate Brokers Association, the prices of apartments in Hanoi have continuously risen in both the primary and secondary markets. The prices of apartments in Ho Chi Minh City have also started to increase again. The main reason is the shortage of supply, while demand is rising.
Economic expert Assoc. Prof. Dr. Dinh Trong Thinh believes that when apartment prices become unaffordable, customers will naturally shift to other segments that suit their budget. He explained, “If someone wants to buy an apartment for VND 60-70 million per square meter but cannot find what they desire, they may choose to buy a townhouse of equivalent value in a deep alley. Although the space may be larger and more convenient to travel within, the location may still be in the city center.”
However, experts caution that buying landed properties is not without its risks. The Deputy General Director of Batdongsan.com.vn advises buyers to take the time to research and gather information about the location, observe the conditions of the roads during peak and off-peak hours, and assess whether the area is prone to flooding or not. Additionally, a thorough understanding of the legal aspects, urban planning, and potential disputes is crucial.
Data from Batdongsan.com.vn shows that the average price of residential properties in Hanoi ranges from VND 85-156 million per square meter, with an average price of VND 115 million per square meter (excluding taxes). Within the past year (from March 2023 to February 2024), these prices have increased by 7.4% compared to the same period the previous year.