With a severe supply shortage, buyers are eagerly awaiting the launch of new projects.

According to Mr. Nguyen Van Dinh, Chairman of the Vietnam Association of Real Estate Brokers (VARS), the total supply of new apartments in Hanoi in 2023 reached approximately 11,000 units, equivalent to 66% of the 2022 figure. This downward trend is expected to continue in the first quarter of 2024, with only about 3,000 new apartments launched across the entire market. Therefore, Hanoi faces a shortage of approximately 50,000 apartments between now and 2025.

Severe supply shortages drive buyers to eagerly anticipate project launch (Figure 1). — Apartment projects in Hanoi have seen a sharp increase in prices recently.

The inevitable consequence of this scarcity has led to a prolonged price surge in Hanoi's apartment market. A recent report by CBRE indicates that the average price for a new apartment in Hanoi in Q1 2024 was 56 million VND/m2, a 19% increase compared to the same period last year. However, in reality, the increase is much higher, reaching approximately 70 million VND/m2.

According to real estate brokers, due to the almost complete lack of new project supply in the secondary market, branded projects have seen significant price increases in the first few months of 2024. For example: Royal City, The Pride, My Dinh Song Da - Sudico Urban Area, Sun Grand City increased by approximately 33%; Mipec Rubik 360, Vinhomes West Point increased by 28%; Dai Thanh Apartment increased by 27%; Seasons Avenue increased by 26%,...

In fact, while previously, with 4-5 billion VND, buyers could own a 70-80 m2 apartment in the inner city, nowadays, with that amount of money, buying a satisfactory apartment outside the city center is not easy, so buyers are quick to finalize purchases as soon as a new project is launched.

Mr. Nguyen Thac Cuong, Deputy General Director of Mai Viet Real Estate Joint Stock Company, said that most people intending to buy a house at this time are making quick decisions when they find a suitable product, instead of spending a lot of time considering and waiting for prices to fall further like in the previous period.

Severe supply shortages drive buyers to eagerly anticipate the project's launch (Figure 2). — Rendering of The Sola Park subdivision within the Imperia Smart City project developed by MIK Group, one of the projects scheduled to launch in the near future.

Advising clients, this brokerage firm suggests that if buyers have sufficient accumulated funds and a stable income, they should consider taking out a mortgage now, as lending interest rates have fallen and developers are offering many sales incentives.

"In the future, when the real estate market truly recovers, inner-city house prices will certainly rise even higher, and then buyers will only be able to move to areas surrounding Hanoi to find lower prices," Mr. Cuong said.

Mr. Nguyen Quoc Hiep, Chairman of the Board of Directors of Global Real Estate Joint Stock Company (GP-Invest), also believes that, at present, everyone considers low interest rates and economic recovery as two key factors, which will lead to increased purchasing power. However, the core issue of the market is whether or not there is available supply; therefore, the current dominant factor lies in the supply, while demand remains very high and is increasing.

According to Mr. Hiep, apartment prices are constantly escalating, but demand remains very high, with people eagerly awaiting the launch of new projects. However, the difficulty lies in the fact that there are too few new projects being launched at this time, further driving up housing prices. This is also the reason why developers who are currently launching or about to launch projects will have a significant advantage.

For example, the Imperia Smart City Phase 2 - The Sola Park project, developed by MIK Group, is becoming the focal point of the real estate market in western Hanoi, with plans to launch more than 4000 high-end apartments with well-designed layouts ranging from 42m2 to 76m2.

In particular, with its prime location at the gateway to the smart city in West Hanoi, existing infrastructure, well-planned transportation network, and expected competitive pricing, many experts and real estate brokers believe that The Sola Park will be a key factor in satisfying the real estate market's "thirst" in 2024.

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