Funding flows to second-tier localities
Funding flows to second-tier localities
The rise in real estate prices in Hanoi is driving investment flows towards second-tier provinces and cities with strong infrastructure development, high urbanisation rates, economic growth, and concentration of industrial zones.
According to a report released by Cushman & Wakefield Vietnam on October 22, the average primary price of apartments in Hanoi during the third quarter was around $2,700 per square metre, marking a 3 per cent increase on-quarter and a 26 per cent rise on-year.
“On an annual basis, this increase has been further propelled by the growing supply of high-end and luxury segments, while the supply of affordable apartments remains limited,” said Bui Trang, country head of Cushman & Wakefield Vietnam. “The average price increase was driven by high-end and luxury projects, with a continued rise in new apartment supply from integrated townships across all segments.”
In the landed housing segment, prices surged to $12,000 per sq.m in the third quarter, a 19 per cent on-quarter rise and 120 per cent on-year increase. This significant surge was attributed to the launch of a new integrated township project by Vinhomes in Dong Anh district. Hanoi’s average primary prices have also witnessed a notable increase from the lower levels recorded in 2023.
In addition to Hanoi, neighbouring provinces have seen substantial real estate price increases in the first three quarters of 2024. These areas have benefitted from the development of transportation and economic infrastructure, particularly through traffic routes directly connected to industrial parks and economic centres.
Le Dinh Chung, CEO of SGO Homes, noted that buyers with under $40,000 now have limited opportunities to invest in landed houses in Hanoi’s prime locations.
“Investors are increasingly shifting their focus to Hanoi’s suburban localitie, such as Bac Ninh, Bac Giang, Hung Yen, Hai Duong, and Haiphong, where they can purchase detached houses within this price range,” Chung told VIR.
Many investors are now seeking land in the suburbs of major cities and localities with strong infrastructure development and high urbanisation rates. These areas have experienced a sharp rise in land transactions, particularly in subdivided plots. Investors can still find products priced around $40,000, which are more accessible for their financial plans.
In the final months of the year, cash flow has also surged into provinces on Hanoi’s outskirts.
“The real estate markets in these provinces are showing positive signs of recovery,” Chung said. “Investors are targeting areas along two key economic axes: the Bac Ninh, Bac Giang, and Vinh Phuc axis as well as the Hung Yen, Hai Duong, Haiphong, and Quang Ninh axis. These areas hold substantial development potential, with robust transport infrastructure closely tied to industrial parks.”
Nguyen Tho Tuyen, chairman of BHS Group, highlighted that after the recent surge in Hanoi’s real estate prices, the market is now expanding into other provinces. He pointed out that provinces such as Haiphong, Bac Giang, Quang Ninh, Thai Binh, and Bac Ninh are experiencing strong industrial growth, further boosting the demand for housing.
Beyond urban development, these provinces also present significant potential for resort projects. Dam Quang Hoan, general director of AZ Green Land, said that the recently revised laws on land, housing, and real estate business will create a more favourable environment for the recovery of the resort property market.
“From mid-2025 onwards, we expect the resort market to recover strongly, as it is closely linked to tourism and will benefit from the spillover effects once other segments recover. Over the next couple of years, this will be an ideal time for resort villa projects to launch,” Hoan said.
In Quang Ninh, the Beverly Hills Halong project was launched in September. Located on Hai Quan hill in Halong city, this project will offer 138 villas, including 22 townhouses, 160 hotel apartments, and 90 apartment buildings.
In the same month, Sun Group introduced the Sun Symphony Residence complex along the banks of the Han River, while in Thanh Hoa province, the market welcomed The Pathway, a new resort real estate project that is part of the Sun Grand Boulevard development located at Sam Son beach square. The Pathway includes nine 20-storey apartment buildings offering a wide variety of apartment types.
