​Luxury apartments in great demand owing to undersupply

​Luxury apartments in great demand owing to undersupply

Despite their exorbitant pricing, many luxury condominium buildings in Hanoi and Ho Chi Minh City remain in high demand, which can be attributed to a lack of available units on the market.

Customers wait to see show flats and complete contract procedures at a luxury apartment project in Nam Tu Liem District, Hanoi. Photo: Quang The / Tuoi Tre

One weekend, the show flats of a high-end condominium building located in Tay Mo Ward, Nam Tu Liem District, Hanoi were packed with buyers looking to buy an apartment.

The project provides luxury apartments of various sizes at VND60 million (US$2,357) to VND95 million ($3,732) per square meter.

Hoang Nga, a real estate agent for HTV International Development Investment JSC, stated that her company has put many luxury apartments of the L.M.E. project for sale, with prices ranging from VND75 million ($2,948) to VND95 million per square meter.

"The project developer has not raised prices for more than a year; nevertheless, the rates will be hiked for the first time, with a 3-5-percent increase," Nga said.

"As a result, customers should act promptly to take advantage of the current discounts and lending support."

At the T.S.P. project in an urban zone that has been operational in Hanoi for the past three years, the foundation for five blocks of apartment complexes with over 4,000 flats is under construction.

According to some real estate agents working near the T.S.P. project, clients have already booked units there, even though it will not formally open for sale until August 2024.

Apartment prices at the W.T.R. project, located along National Highway 32 in Hoai Duc District, Hanoi, are projected to fetch VND43-60 million ($1,690-2,357) per square meter, depending on the location.

Tuoi Tre (Youth) newspaper's analysis indicates that before 2022, the price of a commercial flat was less than VND30 million ($1,178) per square meter, while a social housing apartment cost roughly VND15 million ($589) per square meter.

It is surprising to learn that in mid-2023, the owner of another project, located about one kilometer from the W.T.R. commercial apartment complex, was forced to launch the sale for the 27th time because over 120 units could not be sold or rented.

An official from a real estate company in Hanoi noted that flats in huge residential areas are in high demand due to the abundance of surrounding infrastructure and facilities, such as parks, swimming pools, amusement parks, schools, and hospitals.

"Luxury apartments with available amenities are sought after by many wealthy people who want to buy them for residential purposes," stated T.D.H, a real estate professional.

"There is significant demand for small high-end apartments for leasing so far more transactions have been recorded in comparison to sales at projects launched in 2022 and 2023."

According to Ministry of Construction data, the total number of successful transactions in the national property market increased to 133,512 in the first quarter of 2024 from 109,066 in the first quarter of last year.

In January 2024, out of 133,512 transactions, 35,853 were for apartment buildings and 97,659 for unoccupied land. The apartment market continues to attract people looking to buy a home or invest in the medium and long terms.

According to the Vietnam National Real Estate Association, as the property market recovers, brokerage has been gradually reviving, with an increasing number of brokers returning to the industry, particularly since the beginning of the year.

Ho Chi Minh City: Several projects see positive market absorption

Tran Manh Chi, deputy general director of Dong Tay Property Company, told Tuoi Tre that recent transactions show most are driven by genuine client needs for property purchases.

He cited a project on Mai Chi Tho Street in Thu Duc City as an example.

Despite a steep apartment reservation deposit of up to VND125 million ($4,920) per square meter, bookings reached 70-80 percent of the 700 units available for sale.

Similarly, in another premium apartment project in Binh Thanh District, approximately 100 condos have been sold, each priced at VND9 billion ($353,592).

In another large apartment development with thousands of flats in Thu Duc, around 40-60 units are sold per week, indicating that while market demand has not surged significantly, it is still moving in a healthy direction.

Chi said that a high-rise structure in a residential project in Thu Duc has recently seen an unusually large number of bookings at VND48.6 million ($1,909) per square meter.

Simultaneously, Phu My Hung Development Corporation in District 7, which is selling apartments for The Horizon, The Aurora, and L'Arcade projects, has witnessed a surge in client demand.

All apartments in The Aurora project have been sold, except for a few shophouses, while only about eight percent of the flats remain in The Horizon project.

Despite just opening for sale, the low-rise Phu My Hung L'Arcade building with 37 apartments has seen strong absorption.

According to the sales director of a foreign real estate company, aside from a small number of investors, most consumers nowadays have a real need for homes.

Due to a shortage of supply, along with rising land fees and costs, many developers are focusing on the high-end property segment.

"We find that Hanoi's market absorption is better than that of Ho Chi Minh City, and most of the customers in Hanoi bought houses for their own use," the salesman stated.

Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, stated that only a few developments with full legal documentation are available for sale on the market because of land bank limitations and many projects not yet completing legal procedures.

Many property developers have leveraged their market advantage to mainly launch luxury apartment buildings, with some marketing their mid-range products as high-end units.

Tuoi Tre News