Rising Apartment Prices Expected to Continue if Demand Surges
The latest data from Batdongsan.com.vn reveals that average apartment prices in Hanoi have increased by 17% in the first two months of this year compared to the same period in 2023. Many projects have seen price hikes of up to 30% in just one year. For instance, the prices of apartments in projects like Royal City and The Pride have risen by 33%, while developments like My Dinh Song Da – Sudico, Vinhomes West Point, and Chung Cu Dai Thanh have experienced increases of 32%, 28%, and 27% respectively.
According to Nguyen Quoc Anh, Vice General Director of Batdongsan.com.vn, this price increase partly reflects the supply-demand relationship. In Hanoi, the supply of apartments has not met the growing demand, resulting in significant price hikes. Anh predicts that apartment prices may continue to rise if demand surpasses the current peak.
Caption: The demand for various types of real estate has increased significantly in the first two months of 2024.
In Ho Chi Minh City, apartment prices have also shown an upward trend, although the increase is only around 4% compared to the same period in 2023. This can be attributed to the fact that the apartment market in Ho Chi Minh City has witnessed several adjustments in recent years, leading to a high price level that may remain stable or experience minor fluctuations in the near future.
Caption: Average apartment prices in Hanoi have increased by 17% in the first two months of this year compared to the same period in 2023, with many projects experiencing price hikes of over 30% in just one year.
In contrast to the apartment segment, Savills’ latest report shows that the number of transactions for villas and townhouses in Hanoi in 2023 was the lowest since 2014, with only 359 units sold. The overall number of transactions decreased by 76%, and absorption rates decreased by 31% compared to the previous year. In the fourth quarter of 2023 alone, only 64 units were transacted, marking a 67% decrease compared to the previous year.
Despite the sluggish market performance, prices for villas and townhouses in Hanoi continue to rise. The strongest increase was seen in the high-end villa segment, with prices rising by 55% in the last quarter to reach 160 million VND per square meter of land. Townhouse and shophouse prices also increased by 3% in the last quarter, reaching 194 million VND and 328 million VND per square meter of land respectively.
Caption: Despite sluggish sales, prices for villas and townhouses in Hanoi continue to rise.
Nguyen Quoc Anh advises investors and property buyers to closely observe market trends in the coming period, as the demand for apartments is nearing its resistance point. He stated, “If the level of interest in apartments in the coming months surpasses the peak in August 2023, it could lead to further price increases. However, if demand cools down, apartment prices will undergo adjustments.”
In addition to apartments, various other types of real estate have also experienced increased demand in the early months of 2024 compared to the previous year. Specifically, searches for detached houses have increased by 27%, while searches for townhouses have risen by 15%, villas by 12%, and land by 9%, according to Batdongsan.com.vn.
Le Bao Long, Director of Strategy at Batdongsan.com.vn, believes that with recent changes in laws, the market is expected to witness widespread price growth and the emergence of new projects in terms of quantity and quality. The standards and development capabilities of developers will also be enhanced due to stricter regulations. Moreover, consumer rights in the real estate market will be better protected.
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