Hanoi’s housing market in 2022 is expected to heat up with the launch of an estimated 26,000 new apartments this year, according to real estate consulting firm Cushman & Wakefield (C&W) Vietnam.
|The Grand Hanoi project developed by Masterise Vietnam. Source: Masterise Vietnam|
A recent survey conducted by the firm revealed the introduction of high-class apartment project The Grand Hanoi by late 2021, which were sold out immediately after the launch, breathed fresh air into the city’s apartment market.
In addition, major property developers from the South, including Masterise Homes, Phu Long, and Hung Thinh have joined the Hanoi market, for which C&W Vietnam expected this would provide customers with high-quality products and gradually raise the average market price.
While the city’s gross regional domestic product (GRDP) growth in 2021 was estimated at 2.92%, lower than the 4.18% rate recorded in the previous year, the total FDI commitments to Hanoi rose sharply by 10.6% year-on-year to US$1.5 billion.
According to experts, stable macro-economic conditions and the construction of major infrastructure projects, including the metro line of Cat Linh – Ha Dong, or the interchange of the ring road No.3 and Hanoi-Haiphong expressway, have been instrumental in creating growth momentum for the city’s property market in 2022 and subsequent years.
C&W Vietnam, however, noted a significant difference between Hanoi and Ho Chi Minh City, for which there have been an increasing number of high-class property projects at the latter, with price going up to US$15,000 per square meter.
On the contrary, the supply of luxurious apartments in the capital city has become limited, with grade A apartments in prime locations being offered at over $2,200 per square meter, grade B- at $1,300-2,200 per square meter; and grade C at below $1,300 per square meter.
In the fourth quarter of 2021, Hanoi’s returning to normal helped boost the real estate market with new supplies of 3,600 apartments from five projects.
The total figure, although it has dropped by 20% year-on-year, remained a positive improvement of 2% from the previous quarter. Upon breaking down, grade B apartments made up a lion’s share of 60% of the total on offer, mainly coming from the Trinity Tower project. This was followed by grade C supply making up 35% of the total of projects such as Hausman, T&T DC Complex, or Lavender Garden.
Grade-A apartments, on the other hand, accounted for a modest 5% with a single project of the Grand Hanoi.
Amid the limited supplies, the absorption rate stayed high with nearly 3,100 apartments sold, in which grade B apartments were the most attractive option, accounting for 60% of total transactions. C-grade apartments contributed to over 33% and A-grade of 7%.
C&W Vietnam also pointed out an upward trend in market price in the fourth quarter by an average of 20% against the same period of last year, for which grade A apartment was sold at VND137.3 million ($5,927) per square meter, nearly double the price in the previous quarter.
The price of grade B also increased by 4% against the previous quarter to VND39.5 million ($1,706) per square meter, and grade C by 11% to VND25.8 million, or $1,112.