Apartment buildings in Hoang Mai district, Hanoi. Mid-end apartments remained the most popular products offering to the Hanoi market in the second quarter of this year. (Photo: VNA) This,according to the Ministry of Construction, is because of a lack of newsupply due to the COVID-19 pandemic.
Theministry said in the second quarter, housing prices in Hanoi and Ho Chi MinhCity continued to increase by 2-7 percent quarter on quarter due to the low newsupply, while many localities saw a slight rise of 3 percent.
Houseprices in Hai Phong, Binh Duong and Dong Nai increased by 5-9 percent quarteron quarter.
Rentalprices for serviced apartments and offices continued to fall at a rate ofbetween 1-3 percent. In some big cities, rental prices for retail spacedecreased by 10-30 percent quarter on quarter.
Regardingthe land plot segment, the ministry said that at the beginning of the year,there was ‘price fever’ in some localities nationwide. To solve this, theministry asked the localities to strengthen the management and control of thelocal real estate market.
Sofar, the land plot market has been basically controlled and graduallystabilised with a price reduction of about 10-20 percent compared to thebusier, previous period. However, this segment has still seen a low volume oftransactions.
Theministry also said that Vietnam’s property market is experiencing a shortage ofsocial housing and low-priced commercial housing and does not have enoughinformation relating to the real estate market.
NguyenVan Dinh, permanent vice chairman and general secretary of the Vietnam RealEstate Brokers Association, said at present, the property market had seen areduction of transactions but still attracted more investment from remittancesand profit of securities investment.
Inaddition, many economic sectors in Vietnam reduced production activities due tothe pandemic, so investors had also moved capital into the real estate marketto look for better opportunities.
Bankshad cut deposit interest rates so depositors withdrew their money to pour intothe real estate market, Dinh said.
Thehigh demand of investment but low supply increased property prices, he said,which was the main reason for the price fever in the first quarter, especiallyfor land plots.
Hanoihousing market
Accordingto the CBRE Vietnam report on Hanoi property market in the first half of 2021,there were approximately 7,900 condominium units launched in Hanoi, up 10 percentyear on year.
Althoughthere were some negative impacts from waves of COVID-19 on Hanoi residentialmarket in the first half of the year, the increase in new launches showed arecovery of sales activities and adaptation of both developers and buyers tothe new market situation, compared to the previous year when Vietnam witnessedthe first waves of COVID-19, CBRE said.
Mid-endapartments remained the most popular products accounting for 79 percent oftotal new launches during the first half of this year. In terms of location,the West and the East led the market with relative equal shares of around 39 percentduring the first six months of 2021.
Interms of sales performance, positive market sentiment continued as sold unitssurpassed new launches in the first half. The sold condominium volume in thefirst six months of 2021 was 8,100 units up by 20 percent year on year.
Inthe second quarter of the year, the average primary price of Hanoi market wasrecorded at 1,472 USD per sq.m (net of VAT and maintenance fee), up by 7 percentyear on year and 1 percent quarter on quarter. In the secondary market, theselling price as of the second quarter averaged at 1,180 USD per sq.m, up by 4 percentyear on year.
Recentlycompleted mid-end projects in convenient locations with improved connectivityin Hai Ba Trung and Bac Tu Liem districts have been those that witnessed thestrongest growth over the past year. Selected projects recorded an annualpricing growth of 8-9 percent.
Althoughthis growth rate is higher compared to previous years, it is still lower thanlevel of HCM City’s, which witnessed projects with pricing growth of 10-15 percentper year.
Movingforward, the level of the new launches is expected to hover around 21,000 –24,000 units in 2021, while sold units are expected to stay at positive levelsurpassing the new launch, CBRE said.
Theforecast new launch and sold units during 2021 is higher than that of2020, but still lower than pre-COVID-19 level. It is anticipated that the levelof new launch in Hanoi in 2021-22 will be higher than that of HCM City by 25-30percent.
Theprimary price in the next two years is expected to grow at 4-6 percent perannual, higher than previous year level of 3 percent thanks to improvinginfrastructure system and lower supply volume (as compared to pre COVID-19level).
“Weexpect that not only developers from the South are heading North for newdevelopment opportunities, but individual buyers, especially investors, fromSouthern provinces will start to look for new opportunities in Hanoi andNorthern provinces as supply constraints continue to be an issue in HCM City,”said Nguyen Hoai An, Director of Hanoi Branch, CBRE Vietnam.
Concerningthe Hanoi market in the first half of this year, Do Thu Hang, of Savills Hanoialso said: “The strong infrastructure development narrows the price gap betweenurban and surrounding areas. The inner-city zoning plan has the goal ofreducing the area’s population, it confirms the decentralisation while creatingconditions for renovation, and upgrading, as well as creating high-endproducts.”
Theaverage primary villa price was up 10 percent quarter on quarter and 3 percentyear on year, while townhouses increased 11 percent quarter on quarter and 16percent year on year. High demand for primary areas with imbalanced supply,plus upcoming infrastructure completions have driven escalations, according toSavills.
MatthewPowell, Director, Savills Hanoi, added: “Globally, rural and decentralisedproperty has seen strong demand. This is a direct response from the COVID surgeto move from high density cities as we take advantage of the flexibilitythat Work From Home (WFH) offers.
“Hanoiis decentralising, however less from these international trends, and more fromprice and infrastructure drivers.
“Wedo expect to see greater interest in landed properties, provided prices remainwithin reach.”/.
VNA
