Housing demand in Hanoi continues to be pent-up
Savills' Hanoi Real Estate Market Report Quarter 1 2024 shows that apartment supply recorded in Quarter 1 2024 increased 41% quarter-on-quarter and 99% year-on-year with 4.062 units. Primary supply in the quarter reached 12.928 units, up 9% quarter-on-quarter but down 34% year-on-year.
The imbalance between supply and demand in the apartment segment continues to exist. The market continues to record a shortage of products under 30 million VND/m2 (Grade C), these products only account for 4% of new supply and have been sold out. Since 2020, Grade C primary supply decreased by 47% per year.
Ms. Do Thu Hang, Senior Director, Consulting and Research Department, Savills Hanoi commented: "The supply is mainly concentrated on Grade B apartments, accounting for nearly 90%. The segment of Grade C apartments in the primary market and Grade A apartments only account for a very small proportion. Furthermore, from now until the end of the year, although major laws have been passed, new supply has not been improved."
(Source: Internet)
Meanwhile, in both major cities Hanoi and Ho Chi Minh City, the annual natural demand for housing is about 50.000 houses. This is a result of immigration, moving out for adults and the average number of people per house decreasing... This demand figure has not been met by supply constraints for some time, causing demand to about pent-up housing. In addition, macro factors such as the fluctuating gold market and low interest rates cause investors to look for reasonable and long-term investment channels, which invisibly increases the need to search for apartments. households in the Hanoi market increased even more.
When comparing between product lines, buyers with real housing needs can find that apartment prices are still more reasonable than land-based products in the project such as villas and townhouses. From there, it led to the story of recording an increase in demand and primary prices of the apartment segment in the first quarter of 1. Savills' report for the quarter showed that the primary price of apartments in Hanoi reached 2024 million VND /m59, increased 2% quarter-on-quarter and 3% year-on-year.
Furthermore, in conditions where primary prices are anchored at high levels, the secondary market also recorded growth in transaction volume and prices also increased compared to previous prices. The secondary market in the past also had a more reasonable price level than the primary price, however, with the growing demand for housing, secondary prices in the first months of 2024 also recorded an increase.
Also according to Ms. Hang, buyer psychology has changed. The view that apartments are a "liability" seems to have been a story of the past, but now this view has changed, buyers are gradually realizing that the apartment product line in big cities is also an asset. Even if in the past, the decision to buy an apartment needed to be considered for a long time because this was considered a large value, recently home buyers do not wait too long to make the decision to buy. Buying decisions are now made faster and deposits are made faster too.
However, she also explained that this is not the story of the entire market: "For apartment projects where the price does not go hand in hand with product quality, it is unlikely that buyers will make a quick decision. The projects in the first quarter of 1 that attract the market's attention are all projects from reputable investors whose products, once launched on the market, have a certain guarantee of quality as well as technical requirements. Other legal factors. At the same time, these investors often use leading brands and consulting units, from design units, landscape design units to product designers. In many projects, investors have even chosen famous foreign units to increase the prestige of the project itself. Good projects, reputable investors, and guaranteed legality are the projects that record a positive number of transactions."
Shift of demand to areas with reasonable prices
Faced with escalating price developments, some projects have had their prices pushed beyond their actual value, Ms. Hang noted that buyers need to consider carefully, consider the value of use and the reasonableness of the project. judgment.
“In general, if prices continue to increase, buyers will consider their financial situation. While real housing demand still accounts for the main proportion, if prices continue to rise, buyers can consider and choose the option of renting apartments in the inner city, or accept shifting demand to supply in the provinces. neighboring Hanoi with reasonable prices," Ms. Hang said.
Ms. Do Thu Hang, Senior Director, Consulting and Research, Savills Hanoi
Home buyers with real housing needs can choose supply sources in neighboring localities such as Hung Yen or Bac Ninh, belt 4 or belt 3,5, thanks to infrastructure development. Infrastructure remains the most important lever in changing the value structure of the housing market. Infrastructure development will pull suburban areas "closer" to the city center, reducing travel time. Above all, in neighboring provinces or suburban areas, investors can access land at lower costs, creating a more affordable housing supply.
It is known that products in neighboring provinces will increasingly meet Hanoi's housing needs. Hung Yen and Bac Ninh will provide about 203.000 apartments from 2024 to 2026. The amended laws are expected to create conditions for the real estate market to develop and bring certain improvements to supply. From 2025 onwards, the market will have about 84.400 apartments from 101 projects available for sale.
N.Giang
