Apartment prices continue to rise because of supply shortage
The number of apartment projects for sale is modest, so investors have set very high selling prices. Apartments in Linh Dam area were launched on the market at prices of VND40-45 million per sqm.
An apartment project on Pham Ngoc Thach street is being offered at VND80 million per sqm. A one-bedroom apartment there is priced up to VND4 billion, while larger ones with an area of 100 sqm and higher are priced at VND10 billion.
At another project on Le Van Luong street, with the highest number of apartment blocks in Hanoi, the investor has introduced apartments at prices of VND80 million per sqm. Lower-end apartments in the area are selling at VND60 million per sqm.
Apartments have become more expensive not only in the inner city but also in non-central business areas. Apartments in Nam Tu Liem and Gia Lam are priced at over VND50 million per sqm. At some projects, investors quote prices of VND80-90 million per sqm.
According to Kiet Vo from CBRE Vietnam, low-cost apartments in Hanoi disappeared in late 2021. This happened previously in HCM City, and now is occurring in Hanoi.
The selling price in the primary market in Q2 2022 was $1,872 per sqm, not including VAT and maintenance fee, which was 27 percent higher than the same period last year because of the higher proportion of high-end products.
New supply is predicted to increase again in 2022, with 20,000-22,000 apartments expected to be launched. The figure is lower than previously planned because some projects have been delayed to 2023 and following years. The average primary selling price in Hanoi is expected to have a CAGR of 8-10 percent through 2024.
The Vietnam Association of Realtors (VAR) has predicted that housing product prices will increase by 10 percent in H2.
Do Thu Hang from Savills Hanoi said though supply is short and demand is high, weak liquidity still exists. This is happening with projects with high prices.
The price-to-income ratio is the ratio between the price of a median home to that of the annual median family income, calculated by years of income. According to Numbeo, in 2022, the ratio in Vietnam is 20.5. The ratio is 20 years for Hanoi, or 2 years longer than last year but still lower than HCM City (33.5 years).