Ha Noi property market to continue strong recovery until end-2022

Saturday, Sep 10, 2022 09:03

A real estate agent gives a presentation to potential buyers of an apartment complex in Nam Tu Liem District, Ha Noi. — VNA/VNS Photo

The Ha Noi housing market is expected to continue its bright performance in the second half of 2022 due to the solid recovery of Viet Nam's economy in the first half of the year.

Ha Noi apartment market is expected to see 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 border openings have been addressed. 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 drop quickly from now until end-year. Investors facing financial pressure 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 segment of apartments for sale but an increase in selling prices. Grade B apartments accounted for 71 per cent of the sold units.

The average primary selling price was VND45 million per sq.m in the first six months, up 6 per cent on quarter and 20 per cent on year.

Since 2018, the average primary selling price has increased by 10 per cent each year, while the secondary selling price has increased by 3 per cent each year.

In the first six months of 2022, the average primary selling price was 44 per cent higher than the secondary selling price. That difference in price was much higher than that of 14 per cent in 2018.

Limited new supply together with rising primary prices could make the secondary market hotter.

Meanwhile, according to Hang, in the market of villas and townhouses, the selling price is now quite high while the supply is limited, leading to a low absorption rate. Transactions are mainly in the secondary market between investors. The liquidity in this market will improve once supply with more reasonable selling prices returns to the market.

On the villa and townhouse market, only 302 transactions were recorded in the first half of 2022. Buyers are tending to move to projects in satellite provinces such as Hung Yen, because the Ha Noi market has not met demand, according to Savills.

In the first half of 2022, the Ha Noi market witnessed strong growth in secondary selling prices compared to the same period of last year, with increases of 37 per cent for villas, 22 per cent for shophouses and 20 per cent for townhouses.

Primary supply fell 34 per cent on quarter and 49 per cent on year to the lowest level in the past five years. Therefore, in the first six months, the selling price of villas doubled and the price of townhouses increased by 67 per cent compared to 2018.

The potential for price increases is a factor that makes landed property products continue to be popular with investors.

Until the end of 2022, the market of villas and townhouses will welcome more than 2,100 units from thirteen projects. But this supply faces the fact that buyers are losing interest in the housing market in Ha Noi.

A report conducted by Batdongsan.com.vn showed that in the first six months, the interest from buyers decreased by 11 per cent on year for the villa/townhouse market and 14 per cent on year for shophouse.

Regarding the serviced apartment market, the inner city area will provide 82 per cent of total future supply. Infrastructure projects have increased connectivity among provinces and cities, contributing to an increase of demand.

According to Savills Viet Nam's report on the Ha Noi real estate market, the total supply of serviced apartments in the first half of this year was 5,719 units from 62 projects, up 1 per cent on quarter and 3 per cent on year. The supply in the inner city area accounted for 60 per cent of the total. Grade A units accounted for most of the market.

Average rent increased 2 per cent on quarter and 1 per cent on year, reaching VND550,000 per sq.m each month. The rent in Nam Tu Liem District was the highest at VND640,000 per sq.m each month.

Meanwhile, economist Dinh The Hien said that property prices are predicted to reduce sharply until this year end by 30-40 per cent in rural areas lacking infrastructure that had strong price increase in the past two years, according to Infonet.

The real estate products in sub-urban regions with potential for urbanisation would decrease by 10-20 per cent in price, while the property price of the areas with available infrastructure may decrease or increase slightly, he said. — VNS

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