Hanoi's real estate market soars: Apartment transactions up 101%
Hanoi's real estate market soars: Apartment transactions up 101%
The mid-range segment in Hanoi will continue to play a significant role in supply.
Hanoi's real estate market is on fire, with apartment transactions skyrocketing by 101% to nearly 10,400 transactions in the past two quarters, exceeding all transactions for 2023. This explosive growth reflects strong demand and renewed investor confidence.
This insight comes from Michael Paul Piro, CEO of Indochina Capital, who recently shared an update on the city's real estate landscape.
He underlined the mid-range segment dominates the market, accounting for 98% of the total apartment supply, while the luxury segment represents 2%.
The apartment sector in Hanoi has demonstrated the strongest rebound. Photo: Lien Trang/ The Hanoi Times |
Piro noted that while the real estate market has shown positive trends since the start of the year, recovery rates vary significantly across different segments and regions. Notably, the apartment sector has demonstrated the strongest rebound.
Following the prolonged effects of the Covid-19 pandemic, both searches for and transactions of apartments have surged, with sales improving noticeably each quarter. The recent performance highlights a significant recovery in Hanoi's market, according to the CEO.
However, Piro emphasized that external factors such as demographic shifts—natural population growth and rapid urbanization—along with limited supply, are driving apartment prices to new heights.
He noted that demand remains concentrated in the mid-range to high-end segments, particularly in integrated urban areas in the eastern and western parts of the city.
The expert also pointed out that the total primary supply reached only 10,317 units, down 20% from the previous quarter and 49% year-on-year. Additionally, new supply amounted to 2,697 units, representing a 34% decrease from the last quarter and a 24% decline from the same period last year.
Positive factors boosting Hanoi's real estate market
An apartment project in Hanoi. Photo: VGP |
Looking ahead to the final months of the year, Michael Paul Piro assessed that the mid-range segment will continue to play a significant role in supply.
The report indicates that 13,460 mid-range apartments will be introduced to the market from eight new projects and two integrated urban areas in the western region by late 2024.
Additionally, strong infrastructure developments in Hanoi, including the metro line, along with the new Land Law effective August 1, 2024, are expected to drive the real estate market's recovery, projecting growth of around 20% to 30%.
Piro emphasized several key factors bolstering Hanoi's real estate market, including rapid economic growth, enhanced support policies, and effective credit control. These elements have collectively helped the sector navigate its most challenging phase.
He also noted that the population growth rate indicates a high demand for residential apartments.
Amid land scarcity and legal constraints, both mid-range and luxury apartments are anticipated to attract significant investor interest, with expectations for substantial returns. Primary prices are forecasted to rise by 5% to 10% due to the completion of projects featuring improved construction quality, design, management, and amenities.
From a business perspective, Nguyen Anh Tuan, Vice Chairman of HDMon Group, stated that the demand for housing in Vietnam remains robust. Increasing urbanization, a youthful population, and a strong desire for homeownership are driving this demand.
He highlighted the government's proactive efforts to promote and address challenges in the real estate market, instilling confidence among businesses and paving the way for more positive developments in 2024 compared to previous years.
Additionally, the simultaneous enforcement of three major laws—the 2024 Land Law, the 2023 Housing Law, and the 2023 Real Estate Business Law—is expected to enhance market transparency and create new opportunities for businesses, Tuan said.
