Trend of Investment Capital Shifts from Center to East in Real Estate Sector
The real estate market in East Hanoi has been showing positive signs after the Lunar New Year. There has been a significant increase in the number of customers visiting and exploring projects, as well as a notable growth in the number of transactions. Real estate consultants have observed a 20% increase in daily customer inquiries, particularly in the condominium segment. Transactions are also being finalized at a faster pace. Many customers are making immediate down payments after visiting the model apartments. This vibrant market and increased liquidity have led to a trend of real estate agents from other areas flocking to the East.
In previous years, the real estate market would typically slow down around the middle of the lunar month after Lunar New Year. However, this year has been different. The number of transactions in the East has doubled compared to the end of last year, which is usually considered the peak selling period. Additionally, the city’s data shows that some wards in central Hanoi, such as Hai Ba Trung, Long Bien, and Dong Da, are expected to be merged due to population criteria. The market has heated up after the deposit interest rates of banks decreased, leading to an influx of investment capital into the real estate market. However, the East region benefits from various factors, including infrastructure and market conditions.
Decoding the Attraction of the East Market
Explaining the positive signals in the East market, experts highlight the continuous price growth in the apartment segment, both in the primary and secondary markets. Some apartments have even increased in value by hundreds of millions within a few months. As a result, buyers are more decisive in their transactions, fearing that prices will continue to rise. From an investment perspective, many people expect profit margins and the potential for future value appreciation.
The East region of Hanoi is becoming increasingly attractive due to the growing trend of decentralization from the inner city. Some areas in central Hanoi, such as Hai Ba Trung, Long Bien, and Dong Da, are expected to be merged due to insufficient population criteria. This demonstrates the growing trend of seeking new living spaces in “new centers.” In addition, the current central area no longer meets the living needs of residents due to a scarcity of new projects, limited land availability, and transportation infrastructure limitations. Therefore, people tend to shift towards areas with more available land or developed urban areas with infrastructure and amenities.
During this period, housing projects in the East will benefit from the migration of residents from the inner city. Some residents of the old quarter have already relocated to adjacent districts in the East, attracted by good infrastructure conditions and convenient transportation.
In addition to the demand for a better living environment, another reason for the positive signal of the East real estate is the investor group with high expectations of price appreciation due to the region’s advantages in terms of infrastructure and planning, especially since Gia Lam has become a district.
Moreover, the East region is considered to have the most modern transportation connectivity infrastructure in the capital market. The wide roads and spacious sidewalks, along with modern green landscapes, have completely transformed the appearance of this area – a rare sight in old town areas. The completion of transportation infrastructure projects in Gia Lam, such as the Co Linh interchange, Ly Thanh Tong street, parallel roads, and the Hanoi-Hai Phong expressway, has opened up many transport routes connecting the East region with neighboring districts and provinces. In addition, according to the Capital Transport Planning until 2030, vision until 2050, Hanoi will build 10 large bridges across the Red River, including projects such as Vinh Tuy 2 Bridge, Tran Hung Dao Bridge, Tu Lien Bridge, New Thang Long Bridge, Thuong Cat Bridge, and Hong Ha 9 Bridge. Furthermore, the extended Ring Road 2 and the planned Ring Road 4 will shorten travel time from Hanoi to other localities, adding more attractiveness to the East.
Savills Hanoi believes that the East region, with its large land bank and rapidly developing infrastructure, combined with the presence of major developers, is attracting buyers from the center of Hanoi. The proportion of housing supply in the East in relation to the total supply of the market has increased from a very low level in 2011 to 12% in the first half of 2023. With diverse supply options, investors have more choices.
Additionally, the East is highly regarded due to its vast development potential and reasonable prices compared to other areas. According to data from Savills, the average primary apartment price in the Western region reached 58 million VND/m2 in the first half of 2023, while in the East, it was around 48 million VND/m2. With such price differences, the East still has room for growth.
The Destination for Smart Money
Experienced investors believe that investment properties require favorable conditions such as location, price, and exploitation potential. However, sufficient conditions include living utilities, housing quality, and management services to meet the core needs of living, whether the occupants are homeowners or renters. Therefore, although the East market is becoming a focal point for investment, not all projects are prioritized by savvy investors.
One of the projects that meets these conditions in the central Ocean Park 1 area is the Masteri Waterfront project, located near the 24.5-hectare Ngoc Trai Lake. Recently, there have been days when hundreds of visitors have come to visit the apartments and explore the options for living or rental purposes. This is also the first project delivered and guaranteed for product quality by international real estate developer Masterise Homes in the Northern market.
With the reputation of Masterise Homes, the project’s “brand value” is considered a plus for investors, who also value the quality of completed construction and the operation of the previously handed-over M1, M2, and M3 towers. The distinctive living values of this project guarantee price appreciation and long-term market value of the apartments. According to a representative of a distribution unit, most apartments here have increased in value in less than a year since delivery, with no losses even during the downturn in the market.
Nguyen Nam, an investor with over a decade of real estate investment experience in Hanoi, recently decided to purchase an apartment in this project due to the potential for value appreciation. According to Nam, the Hawaii sub-area has a distinct advantage due to its beautiful location in the city center. The developer has successfully handed over and operated three towers, creating a community with a high-quality living environment and complete facilities.
“The developer is also launching the new H1 tower with attractive pricing policies and a variety of apartment options to suit different financial needs. Facilities such as a year-round swimming pool, international standard gym, 3D golf room, etc., are all practical amenities for families. With the advantages of reputation, living values, and potential for price appreciation, I believe that this is a good opportunity to own a Masteri Waterfront apartment. Another important point is that it can be delivered in October 2024, rather than 2-3 years later. Therefore, investors can use or operate their properties earlier,” added Nam.
Investing in real estate in East Hanoi not only provides an opportunity to experience a modern and convenient lifestyle but also offers potential for quick-thinking investors to capitalize on the opportunities available.