Are Hanoi Apartments on the Verge of a New Peak?
By Business Today
The Hanoi real estate market has seen significant growth in the past decade, with prices doubling in the last ten years. However, the question remains whether this upward trend will continue or if a new peak is in sight.
A Decade of Growth
According to a report by Cushman & Wakefield Vietnam, the real estate market in Hanoi experienced strong growth from 2018 to 2019, before entering a period of slowdown due to the Covid-19 pandemic. Both developers and buyers have been eagerly awaiting the approval and implementation of new land regulations.
As of the first quarter of 2024, there are 670 residential projects with 370,000 apartments in the area. The future supply is expected to expand further towards the west and outskirts of Hanoi, as well as in neighboring provinces within a 30km radius from the city center, such as Bac Ninh and Hung Yen. Additionally, there are increasingly more large-scale urban centers participating in the market, paving the way for new satellite cities in the future in Quang Ninh and Hai Phong. By 2033, it is estimated that the market will have over 1,000 projects with at least 650,000 apartments across the entire region.
Image source: Cushman & Wakefield Vietnam
Similarly, the landed property market currently has 550 projects with 120,000 units and is expected to double in the next ten years. The market has also witnessed the development of projects outside of Hanoi, focusing on green and sustainable living.
Increasing Prices in Hanoi
Over the past decade, the supply of apartments in Hanoi has increased by 2.8 times, while prices have risen by 109%, with an average annual growth rate of 9%. In the last five years alone, the landed property segment has seen a 1.3 times increase in supply and a 54% price increase.
Despite the overall slowdown in the real estate market in early 2024, prices for apartments in Hanoi continue to rise, even increasing by several hundred million dong in a short period.
However, according to Trang Bui, CEO of Cushman & Wakefield Vietnam, the increase in average prices is mainly driven by the introduction of luxury projects, rather than reflecting the entire market situation. Bui believes that the average prices will not continue to rise significantly each year, as future developments will increase supply, offer more product options, and alleviate pricing pressure.
Image source: Trang Bui – CEO of Cushman & Wakefield Vietnam
On the other hand, some experts argue that the Hanoi apartment market is experiencing an artificial boom. Trang Bui acknowledges that Hanoi residents are quick to seize real estate investment opportunities, but there is still a significant housing demand in the city. She believes that the demand for housing, especially for first-time homebuyers, will continue to be strong.
In conclusion, while the Hanoi property market has witnessed remarkable growth in the past decade, the future trajectory remains uncertain. The introduction of more projects and increased supply may help alleviate pricing pressure, but it is still important to carefully analyze market dynamics and consider multiple factors before making any investment decisions in this evolving market.
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