Real estate investment shifting southward
Investment flow in the real estate sector is showing signs of shifting to the south after a period of concentrating mainly in Hà Nội, experts told Vietnam Real Estate Summit 2024 (VRES 2024) held in HCM City on December 5.
Investment flow in the real estate sector is showing signs of shifting to the south after a period of concentrating mainly in Hà Nội, experts told Vietnam Real Estate Summit 2024 (VRES 2024) held in HCM City on December 5.
At the VRES 2024, organised by Batdongsan.com.vn, Đinh Minh Tuấn, southern regional director of the real estate trading platform, highlighted that the Vietnamese real estate market in 2024 is clearly differentiated between the north and south, high-rise and low-rise dwellings, and central and suburban areas.
Regarding the north-south differentiation with the two major cities Hà Nội and HCM City, he said the average real estate listing price in Hà Nội saw significant increases across most segments.
Specifically, in November 2024, the average selling price of apartments in Hà Nội reached VNĐ61 million per square metre, surpassing that in HCM City of VNĐ55 million per sq.m, he said.
For private houses, the selling price in Hà Nội recorded strong growth, reaching VNĐ197 million (US$7,764) per sq.m, an increase of 58 per cent from January 2023, compared to a decline of 10 per cent in HCM City, where the average price was VNĐ108 million ($4,256) per sq.m.
Land plot prices also reflected this trend, with Hà Nội at VNĐ70 million per sq.m compared to HCM City's VNĐ57 million per sq.m.
Although most of the new supply was at higher prices, the absorption rate in the capital city was still quite positive, Tuấn said.
He underscored that the investment flow seems to be shifting southward after a period of concentrating mainly in Hà Nội.
Data from Batdongsan.com.vn revealed a 7 per cent increase in Hanoians searching for properties in HCM City in November 2024, while interest from HCM City in Hà Nội properties dropped by 12 per cent. A survey by the property listing platform showed that 66 per cent of Hanoians are interested in real estate in the South.
Despite the potential in southern markets, legal challenges remain a significant concern for investors and buyers, requiring careful due diligence, he noted.
Lê Bảo Long, marketing director of Batdongsan.com.vn, said its survey showed that legal factors are the top concern for buyers when choosing real estate. Additionally, infrastructure plays a crucial role in influencing investment preferences, particularly with a shift toward the southern region.
Long revealed that key real estate markets prioritised for investment in the coming year include Đà Nẵng, Bình Dương and Đồng Nai.
In terms of high-rise and low-rise segment differentiation, Tuấn said apartments have witnessed a substantial increase in terms of demanding and prices.
The biggest growth driver of apartments comes from real housing demand from young people, with 73 per cent of respondents under 35 identifying apartments as the most preferred property type in 2024.
In contrast, low-rise properties face challenges due to their high value and limited financial support programmes. Additionally, rising consumer spending on e-commerce is reducing demand for low-rise rental properties, he pointed out.
He also noted that central areas continue to attract higher interest and price growth due to their connectivity and job opportunities. Infrastructure developments, such as new metro lines, have further boosted demand, particularly for apartments.
However, suburban areas face challenges, with 46 per cent of surveyed real estate agents expressing concerns about slow community development, infrastructure issues, and excessive distance from central areas, he said.
Prices up by 59 per cent in five years
Also at the summit, Nguyễn Quốc Anh, deputy general director of batdongsan.com.vn, highlighted the swift increase in Việt Nam's real estate prices.
Citing data from the Global Property Guide, he noted that the country’s real estate prices surged by 59 per cent over the past five years, significantly higher than other countries such as the US (54 per cent), Australia (49 per cent), Japan (41 per cent), and Singapore (37 per cent).
Anh stated that economic growth, governance, and social demand are the three main factors influencing real estate prices.
He pointed out that among main investment channels such as the financial market, real estate, gold, foreign currencies, and savings deposits, real estate is considered the best-performing investment channel in the country over the past decade, with apartment returns reaching 197 per cent and land plot profits yielding 137 per cent in Q4 2024 compared to those in Q1 2015.
In addition, Việt Nam’s population and urbanisation rate create numerous opportunities for the growth of real estate demand. The trend of smaller family sizes is also driving demand for property purchases for the next generation to inherit, along with young people's journey to home ownership, he said.
To mark the 10th edition of the summit, Batdongsan.com.vn also presented the Vietnam Real Estate Agent Awards to 130 outstanding agents nationwide across seven categories. These awards highlight the professionalism and dedication of real estate agents, while promoting a healthier, more transparent, and sustainable market. — VNS
