Hà Nội sees recovery in low-rise property prices but apartment prices fall

Saturday, May 25, 2024 09:10

A view of Thường Tín district, Hà Nội. The property prices in this district is expected to surge in the future. — Photo chinhphu.vn

Low-rise real estate prices in the suburbs are expected to show strong growth, especially after the Land Law is effective from July 1.

According to a survey conducted by PropertyGuru Vietnam Company, from the second half of April, the liquidity of the Hà Nội apartment market showed signs of slowing down. 

For some projects, the number of apartment transactions in April was only about half compared to last month. Meanwhile, apartment prices also slowed compared to March with the main reason being that buyers are afraid of too high prices.

According to experts, apartment prices in Hà Nội are now at a level which the market is struggling to absorb. The price of apartments in the suburban areas has been pushed up to VNĐ80-100 million per sqm.

That leads to buyers and investors turning away from top priced apartments, so the prices should be forced lower. 

It has also led to real estate buyers and investors focusing on the lower rise properties in the suburbs, places where prices have not been pushed so high in Q1.

According to Lê Thị Bích Ngọc, deputy general director of Trường Sơn Real Estate Joint Stock Company (Trường Sơn Land), sharp price rises in villas and townhouses on the outskirts of Hà Nội have been pushed up by a large number of real estate investors focusing on this market. 

Investors now are gradually coming back Hà Nội to look for investment opportunities. 

The increasing demand for these kind of areas is expected to carry on until the end of the year.

Ngọc said the low-rise property segment in the future will have sharp increase in input costs of investment projects. The cost of land prices will be closer to the market price after the Land Law 2024 takes effect from July 1, pushing up the cost of land use fees for businesses.

The real estate prices in suburban districts of the capital, such as Gia Lâm, Đông Anh and Hoài Đức have risen significantly over the past four years as many large projects have begun in the same area.

This has been matched by price rises in many other suburban districts like Đan Phượng, Mê Linh and Thanh Trì which have also attracted investors.

The districts of Hà Nội, Thường Tín and Phú Xuyên suburban districts are particularly attractive after the city finalised the nearby second airport plan.

Along with that, the industrial real estate wave in those districts is also attracting investment from large businesses.

Before having those plans, Thường Tín real estate prices only increased slightly each year with rises modest. 

For example the sale price of apartments at the Him Lam Thường Tín project, those with the most beautiful location are only around VNĐ100 million per sq.m, while similar projects in Gia Lâm, Đông Anh and Hoài Đức suburban districts are priced at between VNĐ150-170 million per sq.m.

According to the development planning of the 2021-2030 period, with a vision to 2050, the urban area in the south of Hà Nội will become a centre of hi-tech and smart agriculture and a major logistics hub connecting the southern region of Việt Nam. This area has the suburban districts of Thường Tín, Phú Xuyên, Ứng Hòa, Thanh Oai and Mỹ Đức.

According to investors, once Thường Tín becomes an industrial centre and also a major logistics hub to the south of Hà Nội, this district will lead the price rises.

The prices of low-rise housing is forecast to double compared to current prices in this district, especially in projects that are well-planned and developed by reputable investors. — VNS

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