Hanoi market has lowest villa, townhouse sales in years
Hanoi real estate market in 2023 saw the lowest sales in the villa and townhouse segment in the past 10 years, but selling prices of the villa and townhouse segment in Hanoi continued to increase strongly.
Sales in the fourth quarter of 2023 decreased by 37% on quarter and 67% on year to 64 dwellings. Quarterly absorption of 9% decreased by 5 percentage points (ppts) on quarter but softened by 12 ppts on year, according to the Savill Hanoi's reports on Hanoi real estate market in the second half of 2023.
In 2023, there were only 359 sales, the lowest since 2014. Sales dropped by 76% year on year, and absorption of 36% decreased by 31 ppts year on year.
“Lack of new supply, high priced inventory and low buyer confidence constrained landed property performance,” said Matthew Powell, Director of Savills Hanoi.
Although most developers did not change their prices, high-priced inventory caused primary prices to rise, according to Savills Hanoi.
Primary villa prices increased by 55% on quarter to VND160 million per sq.m of land area (LA), mostly due to low-priced stock in Me Linh selling in the third quarter of 2023. Townhouse prices improved by 3% on quarter to VND194 million per sq.m LA, shophouse prices also increased by 3% on quarter to VND328 million per sq.m LA.
According to Do Thu Hang, senior director, advisory services, Savills Hanoi, regarding high selling prices, besides investors setting too high expectations in terms of price, there were also projects that have had high land use fees and high investment costs, leading to higher primary selling prices than that of surroundings.
High primary prices will shift demand to the secondary market with greater choice, affordability and legal clarity. Secondary villa prices per square metre of land area were 7% less than average primary prices, secondary townhouses cost 24% less than primary. products, and secondary shophouses cost 40% less than primary products.
Regarding new supply, there were 87 new dwellings: 58 dwellings from Solasta Mansion, a new project in Ha Dong, and 29 dwellings from An Lac Green Symphony, an existing project in Hoai Duc. In 2023, there were 272 new dwellings, decreasing by 82% on year and the lowest in ten years.
Primary stock of 710 dwellings came from 16 projects, decreasing by 2% on quarter and 23% on year. Townhouses were the main product with a 44% share of stock.
Infrastructure development such as Ring Roads 3.5 and 4 will expand the Hanoi housing market. From 2024 to 2026, rural districts will have a 75% share of the new supply.
"Infrastructure development will continue to push residential demand to surrounding provinces and areas with more affordable prices and large land banks," said Powell.
In 2024, 2,932 new dwellings from 13 projects are expected, 82% of which will come from new projects.
By 2026, 14,000 new dwellings are expected from 37 projects. Dong Anh is the leading provider with a 30% share of new supply. New mega projects will deliver supply, including Vinhomes Co Loa and Vinhomes Wonder Park.
