Foreigners are leaving the villages, Vietnamese are leaving the cities.

Real estate investment trends: Foreigners are abandoning rural areas, while Vietnamese are abandoning urban areas.

Homebuyers in developed countries are increasingly moving to large cities due to job opportunities and social amenities. However, in Vietnam, the opposite is happening.

After Covid-19, foreigners are heading to the city to buy houses.

According to the South China Morning Post, homebuyers in many developed countries and territories are shifting their focus from suburban areas to bustling cities. This shift is becoming increasingly evident in the UK, Australia, Singapore, and Hong Kong.

“In our observation, during the Covid-19 period, the real estate market in urban areas was somewhat less vibrant compared to suburban and rural markets, but since mid-2023, cities have seen a spectacular surge, as homebuyers gradually returned due to job demands and amenities,” said Liam Bailey, Head of Global Research at Knight Frank.

Knight Frank forecasts that home sales in London (UK) will increase by 2% this year. Meanwhile, home sales in rural areas are expected to decline by around 2%.

According to a report by One Housing, in the first half of 2024, the majority of secondary market transactions for apartments in Hanoi came from districts far from the city center. Gia Lam district accounted for the highest market share at 19%, followed by Nam Tu Liem and Ha Dong districts.

The trend of "leaving the countryside for the city" is also evident in Australia. On the real estate portal OpenLot, sales of new homes in major cities are surging, while demand is declining in more remote areas.

According to Qi Chen, the founder of OpenLot, these two opposing trends stem from the fact that urban areas have a significantly higher number of new housing permits issued compared to suburban areas.

"The pandemic-era dream of living in coastal or mountain towns has gradually lost its appeal. Nowadays, people want to live as close to the biggest cities as possible," shared Qi Chen.

Vietnamese people "return to their villages" to buy real estate.

In Vietnam, although most homebuyers aspire to own properties in the city center, inner-city housing prices are too high for the majority of the population, leading many to move further away from the center to find and purchase real estate.

Currently, in Hanoi's inner city, some new projects such as The Gloria (Ba Dinh district) have prices reaching up to 140 million VND/m2. The Diamond Residence (Thanh Xuan district) has prices ranging from 98 to 118 million VND/m2. Notably, Endless Skyline West Lake (Tay Ho district) has an even higher price of 170-200 million VND/m2.

Even new projects located far from the city center, such as The Wisteria (Hoai Duc district), have prices reaching 57-60 million VND/m2. Lumi Hanoi (Nam Tu Liem district) has a starting price of up to 79 million VND/m2. For Imperia Sola Park (Nam Tu Liem district), apartment prices also range from 67 million VND/m2 and above.

To find a place to live, many people are turning to older projects. However, the prices aren't much more affordable. A project as old as Rice City Linh Dam (Hoang Mai district), which is a decade old, is priced at up to 50 million VND/m2. Another project, CT8A apartment building (Ha Dong district), is being offered by brokers at 48 million VND/m2, even though the apartments there are approximately 17 years old.

For residential land in central Hanoi districts such as Dong Da, Thanh Xuan, and Hai Ba Trung, the price of land in alleys about 3-4 meters wide can reach 200-300 million VND/m2.

Because prices in the city center are very high, many people are increasingly looking for residential land plots in suburban districts. According to Mr. Le Dinh Chung, General Director of SGO Homes, land plots in the outskirts of Hanoi have seen significant growth in the first half of 2024. At times, this segment even recorded localized price surges, with prices increasing by 10-20% compared to the beginning of the year.

In districts like Chuong My, Quoc Oai, and Phu Xuyen, the price of residential land plots with wide alleyways in front of the house (enough for two cars to pass each other) ranges from 25 to 30 million VND/m2. This price is considered much more affordable compared to the inner city, which has attracted a significant number of buyers recently. This trend is expected to continue in the future.

Furthermore, Mr. Le Xuan Nga, General Director of BHS Property, believes that the flow of capital from real estate investors will not only stop in the suburban districts, but may soon flow to provinces surrounding Hanoi such as Bac Ninh and Hung Yen… In recent times, a huge amount of money has been “stagnant” in the inner city for too long. This is the reason why the prices of apartments, low-rise houses, and land-based real estate in the capital have skyrocketed.

The CEO of BHS Property believes that the time when real estate prices in downtown Hanoi can no longer rise is approaching. At that point, the "game" in Hanoi will become extremely fierce for investors, and the market will only be a place for "sharks" with large budgets.

"Investors with small budgets should look for ways to shift their capital to other provinces, cities, and regions. Sooner or later, capital will flow out of Hanoi, possibly by the end of 2024 or the beginning of 2025," Mr. Nga predicted.

Similarly, Mr. Phan Le Thanh Long, CEO of AFA Group and co-founder of the Vietnam Financial Advisors Community (VWA), pointed out that in the period of 2019-2020, the apartment and townhouse segments in Ho Chi Minh City experienced very strong growth. However, the growth momentum then gradually slowed down and almost stagnated, or even declined. “I believe that from now until the end of 2024 and into 2025, housing prices in Hanoi will continue to remain high, but the explosive growth rate will no longer occur. This is similar to Ho Chi Minh City; once prices are high enough, they will no longer increase,” this expert affirmed.

In addition, Mr. Long also pointed out that many investors in Ho Chi Minh City tend to shift their capital to satellite areas, and a similar scenario may soon unfold in Hanoi.

Source: https://baodautu.vn/batdongsan/khau-vi-dau-tu-bat-dong-san-nguoi-nuoc-ngoai-bo-lang-nguoi-viet-bo-pho-d225206.html