Apartment prices in Ha Noi surge for 15th consecutive quarter

Friday, Oct 21, 2022 16:51

In Ha Noi, apartments between VND2 billion and VND4 billion represent 85 per cent of stock, increasing from only 15 per cent in 2018. — Photo baoxaydung.com.vn

Primary prices for apartments on the Ha Noi real estate market have increased for 15 consecutive quarters to reach a level of 53 per cent higher than in the first quarter of 2019, according to Savills Ha Noi.

The Savills Ha Noi's report on the capital's property market in the third quarter of 2022 was released last week. It showed that the average primary asking price of VND47 million per sq.m increased 5 per cent quarter on quarter and 11 per cent year on year. Limited supply, improving quality and increasing construction costs have driven prices up.

"Apartment prices have trended upward since 2019. However, lengthy legal procedures and slow approvals have limited new supply," Do Thu Hang, senior director, Advisory Services, Savills Ha Noi.

Apartments between VND2 billion and VND4 billion represented 85 per cent of stock, increasing from only 15 per cent in 2018. Only 12 per cent of them cost less than VND2 billion. The rest cost more than VND4 billion.

Given that the average monthly rent is VND15 million per unit and units are sold at an average of VND3 billion, the rental yield is 6 per cent.

In the third quarter, the new supply of 5,353 units increased 235 per cent quarter on quarter and 69 per cent year on year. The new supply came from seven new projects and the next phases of seven existing projects. Grade B had 80 per cent, Grade A had 13 per cent and Grade C had 7 per cent.

The primary stock of 21,040 units increased by 17 per cent quarter on quarter and 7 per cent year on year. Eighty-five per cent was Grade B, followed by Grade C with 8 per cent.

During the third quarter, there were 3,605 sales, increasing 61 per cent quarter on quarter and 49 per cent year on year. Grade B had 64 per cent of sales. Newly launched projects were 33 per cent absorbed.

Vinhomes Ocean Park and Vinhomes Smart City accounted for 66 per cent of new launches and 55 per cent of sales in the third quarter of 2022, reflecting continued demand for outlying areas.

Ha Noi will allocate 1,868 ha to housing development, comprising 1,384ha in urban areas and 484ha in rural areas.

The city will require 19.69 million sq.m of apartments (or 166,600 units) by 2025 to cater to demand; however, only 70,000 units are expected. Therefore, there is a deficit of 96,600 units between the real supply and the city's plan.

In the fourth quarter of 2022, eight new launches and the next phases of two projects will add 5,033 units. Grade B will have 70 per cent, and 80 per cent will be in Nam Tu Liem, Gia Lam and Thanh Xuan.

Domestic and foreign developers want residential land in satellite provinces, which increasingly meet Ha Noi's housing demands. Hung Yen and Bac Ninh will provide approximately 104,800 units from 2022 to 2024 onwards. Improving infrastructure, more affordable products and diverse facilities are key success factors.

Meanwhile, according to data from Batdongsan.com.vn, the transaction of buying and selling real estate for sale was relatively quiet in the third quarter of 2022. Still, the rental real estate market recorded more positive signals.

The interest from buyers of real estate products in Ha Noi decreased by 3 per cent compared to the first quarter of 2022, but the demand for rental properties in Ha Noi increased by 58 per cent.

In HCM City, the interest from customers for the sale and rent of real estate in the third quarter increased by 19 per cent and 70 per cent, respectively, compared to the first quarter of 2022.

Attracting the most interest in renting real estate products in both Ha Noi and HCM City markets are apartments. Demand for renting apartments rose 13 per cent in Ha Noi and 24 per cent in HCM City.

Apartment rental prices also increased steadily in many districts. For example, the prices in Tay Ho, Cau Giay, and Nam Tu Liem districts (Ha Noi) increased from 14 to 16 per cent compared to the previous quarter.

HCM City market witnessed a similar trend. Apartment rental prices increased by 14 per cent, 12 per cent and 13 per cent in District 4, District 1 and Binh Thanh District, respectively.

Nguyen Quoc Anh, deputy general director of batdongsan.com.vn, said that the policies of controlling credit in the real estate sector made the market difficult to trade and strongly affected the liquidity of the whole market.

He said the demand for all real estate segments decreased sharply in September. The number of searches decreased by 50 per cent for land plots nationwide, 9 per cent for apartments, 25 per cent for private houses, and 12 per cent for villas and townhouses compared to early 2022.

Those figures showed that the interest from customers for real estate for sale nationwide continued to decline sharply, he noted.

While investors had been thirsty for capital since the beginning of the year, home buyers also had difficulty accessing banking loans to buy real estate products.

Anh said that the congestion of capital was the cause of the cool situation on the market.

According to batdongsan.com.vn's survey for brokers, real estate transactions are facing many difficulties.

Of this, 36 per cent of surveyed brokers said that the most significant barrier is that customers are afraid of the negative market, so they do not dare to invest in real estate.

About 23 per cent of them shared that their transaction cannot be successful because customers have difficulty taking banking loans to buy real estate.

Nineteen per cent of them found that the main obstacle is the price of real estate being too high compared to the financial ability of buyers. — VNS

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