Ha Noi’s real estate market will continue its strong recovery until the end of 2022
The apartment market in Ha Noi is expected to see a new supply of 11,726 units in the second half of 2022 from 14 new projects and the next phase of the two projects.
“Financial requirements are changing, while legal issues and open borders have been resolved. With the abundant supply in the future, selling prices will adjust to ensure a stable and sustainable market,” said Do Thu Hang, Senior Director, Consulting and Research Development, Savills Ha Noi.
“Prices will not come down quickly by the end of the year. Investors facing financial pressures may sell, reducing prices but not by much,” Hang said.
In the first six months of this year, the Ha Noi market saw a decline in the number of transactions in the apartment for sale segment but an increase in selling prices. Category B apartments accounted for 71% of units sold.
The average primary selling price was VND 45 million per square meter in the first six months, up 6% quarter-on-quarter and 20% year-on-year.
Since 2018, the average primary sale price has increased by 10% each year, while the secondary sale price has increased by 3% each year.
In the first six months of 2022, the average primary sale price was 44% higher than the secondary sale price. This price difference was much higher than the 14% difference in 2018.
The limited new supply as well as the rise in primary prices could make the secondary market hotter.
Meanwhile, according to Hang, in the market for villas and townhouses, the sale price is now quite high while the supply is limited, resulting in a low absorption rate. Transactions are mainly made on the secondary market between investors. The liquidity of this market will improve when supply with more reasonable selling prices comes back into the market.
In the market for villas and townhouses, only 302 transactions were recorded in the first half of 2022. Buyers tend to look to projects in satellite provinces such as Hung Yen, as the Ha Noi market has not meets demand, according to Savills.
In the first half of 2022, the Ha Noi market saw strong growth in secondary sale prices compared to the same period last year, with increases of 37% for villas, 22% for boutique houses and 20% for townhouses.
Primary supply fell by 34% over one quarter and 49% over one year to reach its lowest level in five years. Thus, in the first six months, the sale price of villas doubled and the price of townhouses increased by 67% compared to 2018.
The potential for higher prices is one factor that keeps land products popular with investors.
By the end of 2022, the market for villas and townhouses will welcome more than 2,100 units from thirteen projects. But this offer comes up against the fact that buyers are losing interest in the housing market in Ha Noi.
A report by Batdongsan.com.vn showed that in the first six months, buyer interest declined by 11% YoY for the villa/townhouse market and 14% YoY for the shophouse.
For the serviced apartment market, the city center will supply 82% of the total future supply. Infrastructure projects have increased connectivity between provinces and cities, contributing to an increase in demand.
According to Savills Viet Nam’s Ha Noi property market report, the total supply of serviced apartments in the first half of this year was 5,719 units across 62 projects, up 1% quarter-on-quarter and 3% over one year. Supply in the city center accounted for 60% of the total. Class A units accounted for most of the market.
The average rent increased by 2% per quarter and 1% per year, reaching 550,000 VND per m² each month. Rent in Nam Tu Liem district was the highest at 640,000 VND per sq m each month.
Meanwhile, economist Dinh The Hien said real estate prices are expected to drop sharply until the end of this year by 30-40% in rural areas lacking infrastructure which have seen a sharp rise in housing prices. prices over the past two years, according to Infonet.
The price of real estate products in suburban areas with urbanization potential would decrease by 10 to 20 percent, while the price of real estate in areas with available infrastructure could decrease or increase slightly, he said. —VNS