Supply is rising, but prices stay high

Nguyen Thinh's family from Ninh Binh has saved VND3 billion, hoping to buy a 70 sqm apartment in Dinh Cong or Hoang Liet (Hanoi). However, after more than two months of searching, the couple still hasn’t been able to finalize a purchase. Even 70 sqm units in social housing projects are now priced around VND4 billion.

“The apartments we like are all above VND4 billion. Those priced around VND3 billion are either too small or far from the center. We thought about borrowing VND1-1.5 billion, but with our income, it’s too much pressure, so we decided to rent for now and wait for the market to cool down,” Thinh said.

Thanh Phuong (Cau Giay) told VietNamNet that in mid-2024, she bought an old apartment at nearly VND3 billion. Now, similar units in the same area are being listed at VND3.5-3.7 billion. “If I hadn’t bought then, I probably couldn’t afford it now,” she said.

According to the Q2 2025 report from the Ministry of Construction, the average price of Hanoi apartments reached VND80 million/sqm, up 5.6 percent from the previous quarter and 33 percent year-over-year, the highest level in nearly a decade.

CBRE data also recorded a primary market average price of VND79 million/sqm, up 6 percent quarterly and 33 percent annually. Secondary prices (resale market) hovered around VND50 million/sqm, up 1 percent quarterly and 15 percent year-over-year.

Many hoped that an increase in supply would help bring prices down. However, the reality has been the opposite.

According to market research, Q2 saw 8,000 new apartments launched in Hanoi. In the first half of the year, total new supply reached about 14,900 units, up 121 percent year-over-year and nearly matching levels from the market’s pre-pandemic boom.

Despite the surge in supply, the prices of new projects continue to rise. Newer projects are priced higher than previous ones.

While supply is increasing, the mid-range segment remains scarce, putting upward pressure on apartment prices. Some luxury projects have even hit VND120-270 million/sqm, approaching villa prices.

When will prices drop?

Le Dinh Chung, CEO of SGO Homes, said apartment prices in Hanoi are unlikely to decrease in the short term due to the significant supply-demand imbalance, especially for affordable commercial units.

“Liquidity isn’t as hot as before, but the lack of reasonably priced apartments keeps prices high. In the near future, prices may stabilize or slightly increase, some areas may even spike in response to new project launches,” Chung said.

Savills predicted that Hanoi will add about 26,400 new apartments in 2025, and over 58,000 units from 58 projects in 2026-2027. Once pilot projects under National Assembly Resolution 171 are officially implemented, the housing supply, especially in non-central areas, is expected to improve significantly.

Do Thu Hang from Savills Hanoi also said from 2026 onward, with pilot projects in place, housing supply will increase significantly, particularly in outer districts. This trend could help adjust overall market prices to more accessible levels, especially for projects located farther from the center, creating buying opportunities for real homebuyers.

According to Chung, from now to the end of 2025, Hanoi apartment prices are unlikely to decline. Real buyers should make a purchase once they find a suitable property, instead of waiting for prices to drop.

“In reality, waiting for prices to fall is unrealistic. What matters is whether buyers have a sound financial plan, if so, any time can be the right time to buy,” Chung commented.

Meanwhile, investors are still encouraged to view market fluctuations as opportunities, but with caution. They need to consider macroeconomic factors, zoning plans, population density, centrality, industrial zones, and transportation infrastructure.

“Legal clarity remains a key factor to consider, along with the developer’s capacity to ensure capital flow for investors,” Chung stressed.

The CEO of SGO Homes believes that only when the apartment supply, especially affordable commercial projects, significantly increases, will there be real pressure for prices to cool down.

In addition, the state’s stronger investment in transportation infrastructure connecting the inner city to suburban areas will help shift demand and expand urban space. When inventory rises alongside improved infrastructure, price pressures will gradually ease.

Hong Khanh