Residential real estate “sold out” but prices still increase sharply
Low liquidity, high price
According to a report by BHS Group, the apartment market in Hanoi in the first quarter of 2022 continues to lack the supply of affordable and low-priced products. This has made the absorption rate of projects in Hanoi relatively low, but house prices are still climbing.
BHS Group data shows that the total supply of primary apartments in Hanoi in the first quarter of 2022 reached 9,300 products, down 45% compared to the fourth quarter of 2021. However, the absorption rate is only 30%, equivalent to 3,000 apartments purchased by customers. About 6,300 remaining products are in inventory.
Of the 9,300 newly launched apartments, 62% belong to the Grade B apartment segment, equivalent to 4,220 products. Meanwhile, Grade C apartments only have about 645 products.
Also according to the report of BHS Group, due to the gradually scarce supply of apartments in Hanoi, and the price of construction materials continued to increase rapidly, apartment prices continued to increase by 10-23% over the same period last year. last year.
Specifically, with the segment of Grade C apartments, the average price increased from 25.2 million VND/m2 to 28 million VND/m2, an increase of about 10%. Similarly, Grade B apartments increased from 34 million VND/m2 to 40 million VND/m2, an increase of 15%. Grade A apartments increased from 46 million VND/m2, increased to 59.5 million VND/m2, an increase of 23%.
BHS Group forecasts, in 2022, the future supply of apartments in Hanoi will fluctuate between 10,000 – 11,000 products.
Regarding the segment, the supply will be mainly of Grade B products, while Grade C will continue to be scarce due to the high price level and the price of construction materials being more or less affected by other factors. economic and political factors.
In terms of area, the supply will be located in areas away from the center such as Nam Tu Liem, Long Bien or Gia Lam from big projects and because the central land fund is scarce.
According to BHS experts, because the real estate market is still positive, the absorption rate is forecasted to continue to increase steadily over the quarters and the selling price will also record a growth rate of about 5-10% in the coming quarter. in 2022. However, the supply may be affected due to the tightening of credit for real estate loans and macro-economic and political factors.
Demand is high, but affordable apartments are lacking
Ms. Do Thu Hang, senior director, Savills Hanoi Consulting Department said: The apartment market in Hanoi in the first quarter of 2022 was less exciting, when the consumption rate of new products was only 20%.
However, apartment prices increased sharply in all 3 segments. Savills Vietnam said that, in the past 5 years, the average primary asking price of Grade B increased the most at 8%/year. Primary prices of Grade C increase by 7%/year and Grade A by 4%/year.
Do Thu Hang said that in the next few years, the demand to buy houses in Hanoi will continue to increase, especially in the affordable housing segments of around 20 million VND/m2. However, in the next few years, this segment will still be very scarce.
The Hanoi housing development program sets a target that by 2025, the total floor area of social housing will reach 1.25 million m2 from 19 projects, equivalent to only 6% of the new commercial housing area.
Most of the social housing projects will be in the districts of Nam Tu Liem, Hoang Mai, Long Bien, Thanh Tri, each district has 3 projects.
According to Ms. Hang: “Infrastructure will strongly promote the apartment market in the coming time. The first urban railway line of Hanoi will be officially inaugurated in January 2022. Secondary selling prices of projects Projects near train stations increased as high as 18% QoQ, averaging 4% QoQ, higher than the market’s average 2% growth. infrastructure development.
In the period of 2021 – 2025, the city is expected to disburse about 650,000 billion VND of public investment capital. Priority projects include Ring Road 2.5; 3; 3.5; 4; large bridges such as Vinh Tuy bridge phase 2 and Thuong Cat bridge; upgrade and build new national highways such as road 6, road 32, 1A, 2B; and urban railway projects”.
Assessing the apartment market in the near future, Ms. Hang said that the market is currently lacking a supply of affordable housing; Apartments priced below 20 million VND/m2 in existing projects have been absorbed. Meanwhile, there is no new supply.
According to Ms. Hang, although supply is scarce and demand is increasing, Hanoi’s apartment market is experiencing poor liquidity in some projects that set prices too high, exceeding people’s ability to pay.
“The price-to-income index is a basic measure of affordability to buy a home. It is typically calculated as the ratio of median home price to median family income, measured in years. According to Numbeo, in 2022, the price-earnings index in Vietnam will reach 20.5, stable year-on-year, while the index in Hanoi will be at 20 years, up 2 years from last year, however. still lower than Ho Chi Minh City’s index at 33.5 years, Hanoi’s index is still higher than some countries in Southeast Asia including Kuala Lumpur (Malaysia), Yangon (Myanmar), or Chiang Mai and Pattaya (Thailand)”, Ms. Hang emphasized.
Actual observations show that the market has appeared apartments in Gia Lam and Hoai Duc areas with prices up to over 50 million VND/m2. Even in Hung Yen, there are apartment projects with 80 million VND/m2, equivalent to the price of apartments in the center of Hanoi. Apartments are highly valued, but the liquidity of many of these projects is not high.
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