The price of Hanoi apartments is forecast to increase due to the shortage of supply, according to the latest assessment of the Vietnam Association of Realtors (VARS).

Most of the upcoming projects in Hanoi and Ho Chi Minh City are located in districts far from the city's downtown, where land reserves are still abundant for real estate development. Improved infrastructure will further drive up the prices of these projects in the future.

One apartment project in Hanoi. Photo: BRG

According to the Ministry of Planning and Investment, Vietnam's economy is gradually recovering with the number of newly registered enterprises twice as many as those going out of business.

As factories and offices' operations are at full gear again after a long-time closure due to the pandemic, the number of workers returning to cities is rising. Statistics from real estate brokerage offices showed that the number of people asking to rent a room in apartment buildings has skyrocketed in recent months.

“With the increase in demand, leases with a term of one year were signed with a price increase of 10% or more,” noted VARS.

According to the first quarter report of 2022 conducted by the real estate website Batdongsan.com.vn, apartment prices in the capital city have increased by 5%-8% compared to the average selling price in 2021.

In the past two years, apartments in the districts of Cau Giay and Thanh Xuan were offered at around VND30-40 million (US$1,286-$1,715) per square meter. The price has now increased to VND45-60 million ($1,929-$2,572) per square meter.

Districts of Gia Lam, Hoai Duc, and Dong Anh are areas with more land reserves but real estate prices there also tend to increase to a level close to those in the metropolitan area. Specifically, the price of apartments has risen from VND18-20 million ($771-$857) per square meter some months ago to over VND30 million ($1,286) per square meter.

This report also showed that the demand for rental apartments in Hanoi and Ho Chi Minh City skyrocketed in the first quarter of 2022 compared to the same period of 2021. Meanwhile, the supply of apartments in the period dropped in the two cities, according to the real estate website.

In Hanoi, the supply of new apartments was estimated at 2,800 units, 38% less than the same period in 2021, mainly from ongoing projects. Most of the new projects have not started this quarter.

There are many reasons for the decline in the supply of apartments in Hanoi, including policies to tighten legal procedures, bank credit, and increasing depletion of land funds. 

In addition, input costs in projects are also high due to fluctuations in land values, construction material prices, and labor costs, leading to rising apartment prices.

In the near future, the apartment segment with a price of around VND2 billion ($85,745) will almost disappear from the market while the demand for housing is always huge, the stock of apartments with the price of VND30 million ($1,286) per square meter is limited.

This year, some eleven projects are expected to be listed in the Hanoi market, including Vinhomes Ocean Park, Sunshine Green Iconic, FLC Premier Parc, BRG Smart City, and Vinhomes Co Loa, Heritage West Lake, and others.