A recent report by Savills Vietnam shows that apartment prices have increased by 77% in the last 4 years. In the third quarter of 2023, the average primary price of apartments reached 54 million VND/m2, which is almost twice as expensive as it was at the beginning of 2019. The Ministry of Construction states that the selling price of primary apartments has increased continuously for the 19th consecutive quarter, and this is mainly due to the high-end supply segment, which accounts for over 90% of the new supply.
Apartments are less affected by negative market impacts, and their demand to buy has increased by 1%, while the demand to rent has increased by 6% compared to the previous quarter. Apartments priced between 2 to 4 billion VND are the most sought-after. The average price of apartments opened for sale on the new primary market in Hanoi increased by almost 7% quarter-on-quarter, up 14% year-on-year, and reached about 50.8 million VND/m2.
The average selling price in the secondary market still maintained its upward momentum, reaching around 32 million VND/m2. All districts in Hanoi recorded an increase in secondary selling prices in the third quarter compared to the second quarter, and Hoai Duc district and Bac Tu Liem district recorded the highest increases, 8% and 5% respectively.
In Ho Chi Minh City, the secondary selling prices in the third quarter of 2023 increased by 3% compared to the previous quarter, and the primary selling price of apartments has reached more than 60 million VND/m2. According to Cushman & Wakefield, apartment selling prices in Ho Chi Minh City have increased three times in the past ten years, although total supply increased by 4.4 times during this period.
CBRE Vietnam’s report states that the supply of new apartments opened for sale in Hanoi in the third quarter of 2023 reached approximately 3,000 units from 9 projects. In the fourth quarter of 2023, about 4,500 apartments are expected to open for sale, bringing the total supply of new apartments in 2023 to 11,400 units, which is the lowest level in the last 10 years.
Limited new supply, reduced number of apartments handed over, and high average primary price at 52 million VND/m2 have caused secondary selling prices to increase. The average primary price of apartments increased by 13% per year from 2018 to 2022, while primary supply decreased by 14% per year. In the first quarter of 2023, the average primary price is 48% higher than the secondary price.
To overcome difficulties in the real estate market, the Prime Minister assigned the Ministry of Construction to direct and guide real estate businesses to restructure their segments, lower product prices, and restructure the segment for people with real needs, social housing, housing for workers, and low-income people. The Prime Minister requested to direct and speed up the progress of handling administrative procedures related to real estate projects and strengthen inspection and examination to promptly guide and handle cases that cause difficulties and troubles in resolving administrative procedures for people and businesses.
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Source: Vietnam Insider