Hà Nội saw better performance on the residential market in the third quarter of 2023, though many challenges remain for the recovery of this market, according to CBRE Việt Nam.

“The residential market in Hà Nội began to see more positive movements in Q3 this year thanks to the declining interest rates and more flexible sales policies from the developers," said Nguyễn Hoài An, Senior Director of Hà Nội Branch, CBRE Vietnam.

"The new supply, although limited, is expected to improve in Q4, and would probably achieve better absorption backed by the support of interest rate, as well as a more positive buyers’ sentiment typically happening at year end.”

In the third quarter, Hà Nội condominium market witnessed small improvements in absorption with around 3,640 units sold. Compared to the previous quarter, the number of sold units grew by 1.5 times and almost reached the level of the same period last year, according to the CBRE Việt Nam report on Hà Nội property market in the third quarter of 2023.

During the first nine months of 2023, a total of 7,916 condominium units were sold in Hà Nội, the majority of which are developed within large-scale townships in the West and the East of Hà Nội.

In Q3 2023, several developers offered favourable sales policies including direct discounts on selling price of up to nearly 15 per cent for customers making early payment, or 0 per cent interest support for up to 8 years, accelerating the sales velocity of the projects, An said.

In terms of pricing, average primary prices of Hà Nội condominium units in Q3 2023 remained at a high level, reaching VNĐ50.8 million per sq.m (before VAT and maintenance fee), up by nearly 7 per cent quarter on quarter and 14 per cent year on year.

The main reason for such strong increase include the domination of high-end new supply in the total supply launched in this quarter (over 90 per cent), An said.

On the other hand, several projects increasing primary selling prices and launching new supply in higher levels also contributed to the overall increase of the primary prices market wide in this quarter, according to her.

In the secondary market, the average selling price continued its upward trend, at approximately VNĐ32 million per sq.m, which was a 2.7 per cent increase quarter on quarter and 0.8 per cent increase year on year.

By location, all districts witnessed an increase in secondary prices compared to last quarter, among which Đống Đa, Thanh Xuân, Tây Hồ, Nam Từ Liêm and Gia Lâm recorded an increase of over 3 per cent.

Compared to the same period last year, secondary prices of condominium projects in Hoài Đức and Bắc Từ Liêm posted the highest growth of 8 per cent and 5 per cent, respectively.

In the third quarter of 2023, new condominium supply in Hà Nội reached approximately 3,000 units from nine projects, which was 1.5 times higher than Q2 2023.

However, total accumulated launch during the first 9 months of 2023 was 6,925 units, down by 40 per cent year on year.

"It is expected that the total new supply in this year will reach the lowest level recorded in the last 10 years," An said.

Notably, over 90 per cent of those newly launched in Q3 2023 were of high-end positioning, developed in large-scale townships in Nam Từ Liêm and Gia Lâm.

In terms of location, the West continued to dominate the new supply, accounting for nearly 62 per cent of the total supply in Q3. The remaining supply focused on the East, including Hưng Yên Province bordering Hà Nội.

It is expected that in the last quarter of 2023, new Hà Nội condominium launches will continue to rise with more than 4,500 units to launch, making the total new supply of 2023 to reach 11,400 units.

The new supply in Q4 2023 will come from several projects first launching in the market, as well as from follow-on launches of existing projects in the West, the East and the North of Hà Nội.

Đỗ Thu Hằng, Senior Director, Consulting and Research Department, Savills Hà Nội shared: "Usually, in the last quarter of the year, cash flow will likely improve thanks to payments due at the end of the year; this may be a driving force to help buyers make home buying decisions."

"At the same time, another advantage of the market is that interest rates have been adjusted appropriately. This will partly promote the buyer's decision to buy a house."

"Recently, the Government has speeded up public investment so economic activities have also improved. That has supported the real estate market in attracting more capital and increased demand on property products."

"In addition, if amended laws are passed in the near future, they are expected to give the housing market room to grow. For the long-term, the housing demand will remain high due to positive net migration rate, population growth and high urbanisation rate."

However, Hằng also pointed out that the market still had many challenges, for example the gap in supply and demand, and prices still at high rates.

The market records high demand for affordable housing, but the supply of this segment remained low on the entire market, she said.

“The supply of affordable housing is increasingly limited. For instance, the primary supply of affordable apartments (Class C apartments) reached 51 per cent of the Hà Nội market in 2015. This number has gradually decreased to 5 per cent of the total primary supply of the entire market in Q3 2023," Hằng said. — VNS