Ms. Nguyen Hoai An – Senior Director of CBRE Hanoi forecasts that the growth of secondary apartment space in Hanoi is expected to slow down with selling prices at the end of 2024 expected to increase by about 22% year-on-year. In Ho Chi Minh City, primary prices are expected to increase by about 5% year-on-year, contributing to narrowing the gap between primary selling prices of apartments in Hanoi and Ho Chi Minh City.
Supply in Hanoi and Ho Chi Minh City is mixed
In the first 6 months of the year, housing supply developments in Hanoi and Ho Chi Minh City recorded mixed developments, especially in the apartment market.
In Hanoi, the supply of new sales in Q2 increased nearly 4 times compared to the previous quarter, approximately 8,500 units. Generally, in the first 6 months of the year, the total supply of new apartments for sale in Hanoi was more than 10,840 units from 17 projects. This is also the highest supply in the first half of the year recorded since 2020. In this quarter, most of the new supply continues to be concentrated in the West and mainly comes from 2 projects, Lumi Hanoi (phase 1) and Imperia Sola Park.
Meanwhile, in Ho Chi Minh City. After the first quarter with only 500 new apartments for sale, in the second quarter the market recorded nearly 1,200 new apartments for sale, located in the east and south of the city. Most of the apartments offered for sale in the first half of the year are from old projects offered for sale in the next phase, only 2 completely new projects are The Aurora in Phu My Hung area (82 units) and Eaton Park project (841 units) in District 2.
Promoting abundant new supply, Hanoi’s apartment market this quarter recorded a sharp increase in purchasing power, with the number of units sold in the first half of 2024 exceeding the recorded level of the whole year of 2023. In Q2 alone, the number of units sold reached 10,170 units, 5 times the number of units sold in the previous quarter and the same period last year.
Apartment projects concentrated in large urban areas in the West and East of Hanoi continue to record good sales rates. In particular, this quarter recorded a number of projects with a large number of units for sale (1,000 – 2,000 units) but sold out 80-90% of the stock fund. Meanwhile, a project in the West after officially opening phase 1 in Q2 has also quickly implemented phase 2 sales. In terms of product type, small apartments, affordable and convenient for rent such as studios and 1 bedroom recorded good liquidity in the market.
In Ho Chi Minh City, with the supply of new apartments in the first half of the year still limited (only equal to 40% of the new supply of the same period last year), the number of apartments sold in the first 6 months of the year has reached 80% compared to the same period last year, reaching over 1,700 apartments sold. It can be seen that, due to limited new supply, projects with new launches in Ho Chi Minh City. Ho Chi Minh City in the first 6 months of the year all achieved a good sales rate.
A mid-range project in the South of the city is open for sale at an average price of 53 million VND/m2 (excluding VAT, maintenance fees and incentives) lower than the market average in Ho Chi Minh City about 16%, recording sales of more than 90% of the units for sale on the opening day only.
In the East of the city, a luxury apartment project recorded the sale of the remaining units in the final stage with an average price of 170 million VND/m2 on the opening day and a high-end apartment project close to luxury opened for sale in the same month also recorded the sale of more than 70% of the units opened for sale with an average selling price of about 130 million VND/m2 (not yet including VAT, maintenance fees and incentives).
Hanoi apartment prices are approximately Ho Chi Minh City
The selling price of apartments in Hanoi is increasingly approaching the price recorded in Ho Chi Minh City in both primary and secondary markets.
In the primary market, the average selling price of Hanoi apartments is approximately 60 million VND/m2 (excluding VAT, maintenance fees and incentives), only 3 million VND lower than the current average price of Ho Chi Minh City. Compared to the previous quarter, the selling price has increased by 6.5% and increased by nearly 25% year-on-year. The new supply of the high-end segment still accounts for a large proportion, along with the stronger presence of southern investors, making the primary price level of Hanoi apartments remain high.
In addition, the completed and handed over apartment fund in the past 1-2 years has only reached about 15-20,000 units, which is not really abundant compared to the period of 2019-2020 when the handover apartment fund reached 30-40,000 units/year, while the demand for housing is constantly increasing, also contributing to promoting primary selling prices to continue to rise.
In the secondary market, after a period of hot growth in Q1, the increase in selling prices in this quarter has slowed down with an increase of 5% quarter-on-quarter and more than 22% year-on-year. The average secondary selling price of Hanoi apartment is approximately 38 million VND/m2 (excluding VAT and maintenance fees). Primary supply is becoming more abundant, which has made the secondary selling price level enter a more stable cycle.
In Ho Chi Minh City, selling prices in the primary market continued to increase slightly, increasing by about 3% quarter-on-quarter and 6% year-on-year, reaching over 63 million VND/m2. In Q2 alone, more than 70% of the new supply for sale (coming from 2 projects of foreign investors) located in locations near the center was offered for sale with project positioning from high-end to luxury, the primary price was 2-3 times higher than the average price in the market. Meanwhile, at the same time last year, most of the new supplies were located far from the central area, positioned in the mid-to-high-end product segment. Also in the 2nd quarter, a number of projects located in the city center area that were offered for sale 5-7 years ago also offered for sale a small number of remaining units with a selling price nearly twice as high as the previous sale.
With the momentum of price increase in the primary market, along with projects adjusting the primary selling price higher than the asking price in previous periods, the secondary selling price market of Ho Chi Minh City apartments. Ho Chi Minh City also recorded an increase of 4% quarter-on-quarter, and 3% year-on-year. Areas far from the center, with a large supply of apartments, recorded a stop-loss situation in the past time also recorded a secondary asking price increase of 2-3% year-on-year thanks to good information on the completion and opening of new utilities in the project and the progress of completing regional infrastructure around the project in Q2.
Apartment price forecast in the second half of the year
Ms. Nguyen Hoai An – Senior Director of CBRE Hanoi forecasts that from now until the end of 2024, with the primary supply continuing to increase in the coming time, the increase in secondary selling prices is expected to slow down with the selling price at the end of 2024 expected to increase by about 22% year-on-year.
In Ho Chi Minh City. With more than 8,000 new apartments expected to be opened for sale in 2024, the primary price of apartments is expected to increase by about 5% year-on-year, contributing to narrowing the gap in primary selling prices of apartments in Hanoi and Ho Chi Minh City.
According to CBRE experts, with the current trend of adjusting interest rates, in the near future, homebuyers will have to consider their affordability. The increase in the adjusted interest rate will affect the psychology of buyers and the business strategy of investors due to the costs of capital mobilization. Depending on the increase in interest rates, the upcoming project price increase will have to be adjusted accordingly, because it must be based on the needs and affordability of buyers.
