'Explosion' in supply of high-end and luxury apartments in Hanoi, sky-high prices

"Explosion" of high-end and luxury supply in Hanoi

According to OneHousing Center for Market Research and Customer Insights, the supply of newly opened apartments in Hanoi in the second quarter of 2024 reached 8,400 units, an increase of 97% compared to the first quarter of 2024.

The number of new apartment supply in the quarter is nearly equivalent to the number of new apartment supply opened in Hanoi in the whole year of 2023.

The number of new apartment supply in the second quarter of 2024 is nearly equivalent to the number of new apartment supply in Hanoi in the whole year of 2023. (Photo: TT)

Of which, the high-end apartment segment accounts for 61%. The luxury supply has increased its market share strongly, reaching 36% of the total market and is mainly concentrated in the West of Hanoi. Meanwhile, the supply of mid-range apartments only reached 2.3%.

Consumption in the second quarter of 2024 reached 8,300 units, 4.5 times higher than the same period last year and an increase of 43% compared to the second quarter of 2022.

The primary selling price of apartments in Hanoi in the second quarter of 2024 will reach about VND 65 million/m2, up 25% compared to the first quarter of 2024 and up 30% compared to the same period in 2023, due to the new supply being mainly high-end and luxury.

According to Mr. Tran Minh Tien, Director of OneHousing Market Research and Customer Insight Center, supply and consumption both reached the highest level since 2021, which is a sign that the Hanoi apartment market is recovering strongly.

In particular, some high-end - luxury projects with relatively high prices have also sold out in a short time, showing the very high market demand for the apartment segment.

According to Mr. Tien's explanation, there are 3 main reasons to explain this phenomenon.

Firstly, the type of apartment with easy liquidity such as studio and 1 bedroom has been favored by investors recently because it is easy to rent out with monthly cash flow, at the same time has good potential for price increase, so it is always in a state of being sold out in the first time of sale.

Second, real estate loan interest rates in the second quarter remained low with loan packages ranging from 50 - 80% of the apartment value.

Sales policies that extend payment progress by 2%-5% of the apartment value each time with a long interest rate support period are also applied by investors, helping customers to extend their payment cash flow and at the same time stimulating demand for home purchases.

Third, the Land Law, Housing Law, Real Estate Business Law (amended) and the Law on Credit Institutions were requested by the Prime Minister to accelerate the development of guidelines for the implementation of the law so that it can take effect on August 1, 2024, which has helped the market to feel secure in trading in a stable and sustainable manner.

“With the strong growth of the Hanoi apartment market in the second quarter, and the three Real Estate Laws coming into effect in the coming time, it will be an important driving force for the market in the second half of 2024,” Mr. Tien commented.

Prices anchor at high levels, secondary trading still up 40%

Regarding the transfer market, in the second quarter of 2024, secondary transactions reached 23,000 units, a sharp increase of 40% compared to the first quarter of 2024, of which residential land transactions accounted for a large proportion, 57% of total transactions.

Regarding residential land, the transaction volume in the first 6 months of 2024 reached 22,000 units. In the second quarter of 2024 alone, the transaction volume reached 13,000 units, an increase of 50% compared to the first quarter of 2024 due to a sharp increase in transactions in April 2024.

Ha Dong and Long Bien districts continue to lead in residential land transactions, accounting for more than 40% of the market share, followed by Hoang Mai, Gia Lam and Dong Da.

Notably, the number of transactions in Long Bien district skyrocketed in the second quarter of 2024 by 2,700 units, an increase of 93% compared to the first quarter of 2024, becoming the district with the most transactions in the second quarter of 2024.

Mr. Tran Minh Tien said that Vietnam's economy in the first 6 months of 2024 also grew higher than expected. In general, GDP in the first 6 months of 2024 increased by 6.42% compared to the same period in 2023, higher than the first quarter of 2024, and higher than the World Bank's forecast for the whole year (about 6%). CPI tends to increase continuously from 2023, reaching 4%, approaching the government's target of 4 - 4.5%.

“The FED and ECB are expected to cut interest rates at the end of the year, which will help reduce inflationary pressure in the last months of 2024. If the world situation is favorable, CPI and exchange rates remain low, the economy in the last 6 months of 2024 will continue to create favorable conditions for the real estate market,” Mr. Tran Minh Tien added.

Source: https://www.congluan.vn/bung-no-nguon-cung-can-ho-cao-cap-va-hang-sang-tai-ha-noi-gia-ban-cao-chot-vot-post303964.html