Price of apartments in Hanoi equal to those in Ho Chi Minh City

People in Ho Chi Minh City are increasingly interested in buying apartments in Hanoi, according to a report on the real estate market in the first quarter of 2024 by Batdongsan.com.vn. The report shows positive signs in the real estate market, with 19% of real estate businesses surveyed reporting an increase in personnel and 26% stating that they have increased their marketing budget.

The CEO of Batdongsan.com.vn, Mr. Bach Duong, said that the historical price data for real estate on the platform indicates that the prices of apartments for sale in Hanoi are approaching those in Ho Chi Minh City. Specifically, in the first quarter of 2024, the average price of apartments in Hanoi was 46 million VND per square meter, while the price of apartments in Ho Chi Minh City was 48 million VND per square meter.

At the beginning of 2018, the prices of apartments in Hanoi and Ho Chi Minh City were 27 million and 31 million VND per square meter, respectively. After 6 years, the average price of apartments in Hanoi increased by 70%, surpassing the 55% increase in Ho Chi Minh City.

There are two main reasons for the sharp increase in apartment prices in Hanoi, according to Mr. Nguyen Quoc Anh, Deputy CEO of Batdongsan.com.vn. Firstly, the supply of apartments in Hanoi is limited. Although there have been measures to resolve legal issues for developers, recent projects have only contributed around 20,000 to 30,000 apartments per year, while the normal demand is around 70,000 to 80,000 apartments per year.

Secondly, the demand for apartments in Hanoi is high. Notably, this demand comes not only from Hanoi and northern provinces but also from the southern region. Data from Batdongsan.com.vn reveals surprising information: the interest in apartments in Hanoi from real estate seekers from Ho Chi Minh City has increased 7.5 times from the first quarter of 2021 to the present, while the search for apartments in Ho Chi Minh City by its residents has only increased twice during the same period.

Mr. Nguyen Quoc Anh believes that people in Ho Chi Minh City are increasingly interested in apartments in Hanoi because the price level is relatively stable and still lower than in Ho Chi Minh City. Additionally, the rental yield for apartments in Hanoi is higher than in Ho Chi Minh City. Specifically, the rental yield for apartments in Hanoi from the beginning of 2023 until now ranges from 4.1% to 4.9%, while in Ho Chi Minh City, it ranges from 3.9% to 4.5%.

In addition, in recent times, some developers in the southern market have entered the northern market. A loyal customer base from the south has shown interest in newly developed projects in Hanoi, contributing to the high demand for apartments in the city.

Triple growth in apartment supply in Hanoi

A market research report on the real estate market in the first quarter and the forecast for the second quarter of 2024 by the Real Estate and Financial Economics Research Institute of Dat Xanh Services shows that the supply of new apartments in Hanoi is expected to increase by 7.5 times compared to the first quarter of 2023. These apartments come from various projects such as Lumiere Evergreen, The Wisteria, The Miami – Vinhomes Smart City, and Moonlight 1 – An Lac Symphony.

In terms of prices, the new apartment projects in Hanoi in the first quarter of 2024 mainly focused on the B and A segments, with very few projects in the C and A+ segments. However, the prices in all four segments have seen significant growth.

In the C segment, prices range from 30 to 45 million VND per square meter (an increase of 20-30% compared to the same period). In the B segment, prices range from 45 to 60 million VND per square meter (an increase of 15-20% compared to the same period). In the A segment, prices range from 60 to 100 million VND per square meter (an increase of 5-10% compared to the same period), and in the A+ segment, prices range from 100 to 200 million VND per square meter (an increase of 15-20% compared to the same period).

The absorption rate has dramatically increased, with projects receiving great attention from customers, and many projects announcing “sold out” in the first quarter of 2024. Specifically, the absorption rate of apartments in Hanoi reached 60-65%, an increase of 4-4.5 times compared to the same period in 2023.

According to Dr. Pham Anh Khoi, the director of the Real Estate and Financial Economics Research Institute of Dat Xanh Services, the Hanoi apartment market has shown good growth from the fourth quarter of 2023 to the first quarter of 2024, with significant increases in prices and absorption rates.

“The supply of new apartments in the Hanoi market is very scarce. The price of apartments in Hanoi is still relatively low compared to Ho Chi Minh City in most segments. Moreover, after COVID-19, local residents in Hanoi and surrounding areas tend to invest in real estate in Hanoi and satellite towns instead of distant areas. Therefore, the trend of increasing apartment prices in Hanoi is expected to continue until they approach the prices in Ho Chi Minh City,” Mr. Khoi said.

Meanwhile, the apartment market in Ho Chi Minh City is growing slower than the Hanoi market in terms of supply, prices, and absorption rates. In the first quarter of 2024, the supply of apartments in Ho Chi Minh City decreased significantly. Only about 690 new products were introduced to the market, coming from projects such as The Aurora, Homyland Riverside, The Privia, and Celadon City, a decrease of one-third compared to the same period in the first quarter of 2023.

Although the absorption rate of apartments in Ho Chi Minh City is lower than in Hanoi, it has still increased by 1-1.5 times compared to 2023, reaching an average absorption rate of 25-30% in the first quarter of 2024. The best absorption rates are found in apartments with prices below 50 million VND per square meter.

“It is forecasted that there will not be many apartments with prices below 50 million VND per square meter in Ho Chi Minh City, just like the current situation in Hanoi,” Mr. Khoi said.