Investors wait for better market
According to a newly released report by Cushman & Wakefield - a real estate services company, the townhouse market (including townhouses and villas in projects) in the first quarter had no new supply entering, even new supply from existing projects.
Meanwhile, the first quarter of this year continued to witness a decline in consumption in Hanoi with 35 units sold, down 51% and 91% compared to the same period last quarter and the same period last year.
The sluggish market situation shows that both investors and buyers are hesitant to transact. The reasons are the negative impacts of credit tightening, legal issues and bonds of real estate corporations and the global economic crisis in 2023.
The price of HUD Me Linh Central villas (Hanoi) is showing a sideways trend, with some villas having to be sold at a loss or at a discount (Photo: Ha Phong).
The average price of townhouses in Hanoi this quarter decreased slightly to 7,471 USD/m2 (about 175 million VND/m2), down 2.7% quarter-on-quarter and almost unchanged compared to the same period last year. Existing projects kept their selling prices unchanged this quarter and the reason for the decrease in the average price of townhouses was that high-end projects locked their inventory.
The real estate service company said that most of the land projects in Hanoi have locked their sales boards as investors wait for a better real estate market. Meanwhile, real buyers and long-term investors will now be the main focus of the market.
Townhouses and villas all reduced in price
Previously, real estate market reports from the Ministry of Construction and many market research units showed that the number of townhouse and villa transactions from the fourth quarter of last year to the first quarter of this year was the lowest in many years.
Housing prices and some types of real estate fluctuated in the first quarter of this year. Notably, secondary transaction prices of individual houses including villas, townhouses and land plots in the first quarter tended to decrease compared to the previous quarter.
Many villas in Nam An Khanh urban area (Hoai Duc, Hanoi) have been abandoned for many years (Photo: Ha Phong).
The Ministry of Construction said that the average price reduction of some projects in Hanoi and Ho Chi Minh City has fluctuated.
Specifically, the price fluctuations of individual houses in Hanoi include Trung Van urban area (Nam Tu Liem district) decreased by about 7.1% (down to 159.5 million VND/m2); Khai Son City (Long Bien district) decreased by about 8.1% (down to 167.2 million VND/m2); An Khang Villa (Ha Dong district) decreased by about 8.9% (down to 122.9 million VND/m2); Lan Vien Villa (Gia Lam district) decreased by about 7.3% (down to 80.4 million VND/m2); Van Canh urban area (Hoai Duc district) decreased by about 6.9% (down to 90.1 million VND/m2).
According to JLL Vietnam, the supply of the townhouse market, including townhouses and villas, continued to witness a gloomy quarter when many large projects stopped selling in the first quarter of this year. In addition to the sharp decrease in new supply, due to weak market sentiment and difficulties in disbursement, transaction activities in the first quarter of the townhouse market (villas and townhouses) almost froze.
Meanwhile, some large projects have temporarily suspended transactions. Notably, some small and medium-sized projects have witnessed many transactions of deposit refunds or returns due to banks tightening credit room for real estate loans, making it difficult for buyers to pay. This caused the absorption rate in the quarter to reach negative levels.
Primary prices for villas fell 14% quarter-on-quarter to VND111 million per square meter, while townhouses fell 3% quarter-on-quarter to VND167 million per square meter. The decline was due to new supply and low-priced inventory in Me Linh district, according to the research unit.
Limited primary supply and high primary prices will shift demand to the secondary market. In the first quarter of this year, the average secondary price reached VND22 billion/unit, 17% lower than the primary price.
According to Dan Tri , the general price level of townhouses in the Hanoi market remains high. In particular, in central districts such as Ba Dinh, Hoan Kiem, Dong Da, buyers have almost no new options. Housing and townhouse projects in Thanh Xuan and Tay Ho districts with prices up to 400 million VND/m2 have almost no transactions.
However, despite their great value, there are many townhouses and villas with great value but are deserted in urban areas.
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