Earning 250 million VND/year, how long does it take to buy a house in Hanoi?

According to a recently released market report by Savills Vietnam, in the third quarter of 2024, the Hanoi apartment market recorded growth in both supply and transaction volume, with the B-class segment dominating.

However, the gap between income and house prices is becoming increasingly pronounced, creating certain difficulties for homebuyers.

In addition, the villa and townhouse market in Hanoi recorded an increase in supply in suburban areas, with the absorption rate increasing by 30 percentage points compared to the previous quarter, and primary prices decreasing due to the location of the new supply in the quarter being further from the city center.

It is difficult for people to achieve their dream of owning a home as housing prices continue to rise.

In the first nine months of 2024, the Hanoi apartment market saw the launch of over 12,000 new units. In the third quarter of 2024, 5,265 new apartments were offered, a sharp increase of 95% quarter-on-quarter and 178% year-on-year.

However, primary supply remained down 47% year-on-year. Despite the somewhat limited primary supply, the number of apartments sold reached 6,840 units in Q3 2024, a 35% quarter-on-quarter and a 226% year-on-year increase.

The total number of apartments sold in the first nine months of 2024 reached 17,000 units. Savills statistics show that this number is only slightly lower than the 2019 level, and higher than in 2020 – the time when the market began to be affected by the Covid-19 pandemic.

The majority of new supply remains in the B-segment, concentrated in large projects in East and West Hanoi. Nam Tu Liem and Cau Giay accounted for 63% of primary supply and 78% of transactions in the quarter. 92% of the supply in the West area consists of B-segment apartments. The West area will provide 21,000 apartments from 28 projects, equivalent to 17% of future supply.

Earning 250 million VND per year, people in Hanoi would need 18 years without spending any money to own a house (Photo: Huu Thang).

Regarding prices, Ms. Do Thi Thu Hang, Senior Director of Research and Consulting at Savills Hanoi, stated that house prices for sale in Hanoi continue to rise. Primary sales prices are currently at VND 69 million/m2, up 6% from the previous quarter and 28% year-on-year.

In the secondary market, the average price of apartments in Q3 2024 was VND 51 million/m², an increase of 10% compared to the previous quarter and 41% compared to last year.

Average secondary market prices have increased by 17% annually since 2020, with Class C properties experiencing the strongest growth at 20% per year, followed by Class A at 16% per year and Class B at 15% per year.

Many buyers are shifting from the primary to the secondary market because it offers more choices and better legal protection.

Against this backdrop, Savills experts assess: "Despite market growth, the gap between household income and house prices is becoming increasingly apparent. With the average household income in Hanoi at around 250 million VND/year, and the average apartment price at around 4 billion VND, people would need to save for 18 years without spending to be able to buy a house."

"While average incomes have only grown by 6% annually, house prices in the secondary market have increased by an average of 17-20%, making home ownership increasingly difficult."

Entering the fourth quarter of 2024, the market is expected to welcome an additional 9,700 new apartments, of which 88% will come from subsequent phases of major projects.

From 2025 onwards, approximately 110,000 units from 106 projects will be brought to the market. Class B will continue to lead with 54% of future supply. Dong Anh, Hoai Duc, Gia Lam, and Hoang Mai will contribute 62% of the market share.

Ms. Hang added: "The resolution of legal obstacles is gradually improving, opening up opportunities for new projects to be implemented. However, this process will be slow and it is difficult to immediately meet the diverse product needs of the market."

The early implementation of the Land Law, the Real Estate Business Law, and the Housing Law, along with the gradually published guiding documents, will continue to bring positive impacts to the market, but this process will not happen quickly."

The supply of villas is growing well.

In the villa and townhouse segment, concentrated in suburban areas, new supply reached 176 units, a 38% increase quarter-on-quarter in Q3 2024.

Primary supply reached 673 units from 15 projects, an 11% increase quarter-on-quarter but a 7% decrease year-on-year. Villas and townhouses were the dominant types, each accounting for 38% of the primary supply.

These projects have lower selling prices due to their location far from the city center; the average primary market price in Q3 2024 tended to decrease compared to the previous quarter, and a large amount of primary supply was concentrated in suburban projects.

Primary market prices for villas decreased by 16% quarter-on-quarter to VND 150 million/m2 of land. Townhouse prices decreased by 17% quarter-on-quarter to VND 156 million/m2 of land. Shophouse prices decreased by 14% quarter-on-quarter to VND 249 million/m2 of land.

Meanwhile, the secondary market recorded steady price increases, both compared to the previous quarter and the same period last year. This indicates that villas and townhouses remain attractive options for investors in the secondary market.

Secondary market prices for villas are 13% higher than primary market prices, increasing 3% quarter-on-quarter to VND 169 million/m2 of land. Townhouses increased 4% quarter-on-quarter to VND 187 million/m2 of land, 20% higher than primary market prices.

Primary market prices for villas decreased by 16% quarter-on-quarter to 150 million VND/m2 of land (Photo: Huu Thang).

According to Savills experts: "Despite fluctuations in supply and prices, the villa and townhouse market in Hanoi in Q3 2024 recorded many positive signs, with an absorption rate of 48%, an increase of 30 percentage points compared to the previous quarter and compared to the same period last year."

Projects in suburban areas such as Ha Dong district, Me Linh district, and Thuong Tin district have high demand. Me Linh leads in primary transactions with 37%, followed by Ha Dong with 33% and Thuong Tin with 12%.

Savills forecasts that absorption levels will continue to fluctuate as the infrastructure of the Vinhomes Global Gate project is expected to be completed and contracts begin to be signed around October 2024, bringing 2,599 units to the market.

Three projects will provide a total of 2,975 units in the next quarter. Dong Anh District will account for the majority of future supply with 19%. Me Linh District follows with 16% and Ha Dong District with 15%.

Source: https://www.nguoiduatin.vn/kiem-250-trieu-dong-nam-phai-mat-bao-lau-de-mua-duoc-nha-ha-noi-204241009161615798.htm