Hanoi: Condominium market prices in both Hanoi and Ho Chi Minh City maintain an upward trend this year, according to CBRE Vietnam.

Condominium primary selling prices in both cities remained high, especially in Hanoi, with primary prices recording rapid growth mainly due to the large quantity of new supply in the high-end segment.

The number of high-end condominium units accounted for 75% in Hanoi and 84% in HCM City in 2023’s total new launches. On the other hand, the mid-point segment, with selling prices more budget-friendly to the majority of the population, accounted for only a small proportion, while the affordable segment has completely disappeared in both markets in the past few years.

Dung Duong, Executive Director of CBRE Vietnam, said: “In 2023, we observed a reversal in the trend between the Hanoi and HCM City residential markets, with the Hanoi market now following a similar trajectory to that of HCM City about three years ago.”

Particularly, at the end of 2023, the average primary selling pri
ce in Hanoi reached 53 million VND per sqm (excluding VAT and maintenance fees), up 4.6% quarter on quarter and 14.6% year on year. This was the primary price recorded in HCM City during the 2020-2021 period.

On the contrary, the primary prices for condominiums in HCM City levelled off at around more than 61 million VND per sq.m in 2023, down 1.7% year on year.

Vo Huynh Tuan Kiet, Associate Director of CBRE Vietnam’s Housing Project Marketing, said at the end of 2023, real estate companies had many policies on reducing selling prices, with a condition that buyers must implement faster payment to receive the house. This was a business strategy and the decreasing trend was only for some projects in HCM City.

In the secondary market, the selling price of condominiums in Hanoi and HCM City went on opposite trends, according to the CBRE Vietnam’s report on Hanoi real estate market in the fourth quarter of 2023, released on January 9.

Secondary prices in Hanoi in the fourth quarter of 2023 continued to increase
from the previous quarter, reaching around 33 million VND per sq.m, up 5% year on year. Limited new supply, while newly launched projects setting high prices contributed to boosting the demand in the secondary condominium market in Hanoi.

In contrast, secondary prices in HCM City recorded 45 million VND per sq.m for the condominium market and 140 million VND per sq.m for the landed property market on average, down 5% and 2% year on year, respectively.

During 2023, the secondary market in HCM City went through several price adjustments, yet the price fall gradually slowed towards the last quarter.

“Continuing this momentum, in 2024 we also expect that the overall price level in the housing market in Hanoi and HCM City will tend to be stable. Especially, the apartment housing segment in Hanoi will continue the increase in prices in 2024,” Nguyen Hoai An, Senior Director, Hanoi Branch, CBRE Vietnam, said.

According to experts, reducing the selling price of commercial property is still a difficult issue due t
o the small number of approved projects, development of project for a long time, and increase in construction costs and prices of building materials.

Le Dinh Chung, General Director of SGO Homes, said it was difficult to reduce the prices of the commercial products. The State was promoting the development of social and affordable housing projects, but it was difficult to find land funds for development of those products.

Many experts believe that housing prices can only decrease if the market increases supply. If social housing projects or mid-range price houses enter the market, the housing prices could be more stable.

At present, the policies supporting social housing development, from land taxes to loan incentive packages, are available and those are expected to have positive effects on the property market in 2024.

In particular, the draft amended Land Law has basically been completed and will be submitted to the National Assembly for approval at an extraordinary meeting next week.

When this law is pa
ssed, many projects with legal obstacles will have the opportunity to have these removed, so they can continue to develop, creating supply for the market.

With these factors, the real estate market in 2024 is expected to enter a new cycle with more stability and sustainable growth.

According to the CBRE’s report, in 2023, the residential market in both Hanoi and HCM City experienced the lowest new supply in the past ten years.

Specifically, in Hanoi, nearly 10,300 condominiums and 2,600 landed property units were newly launched in 2023, representing a decrease of 32% and 84%, respectively, compared to 2022.

In HCM City, there was a more modest new supply with nearly 8,700 condominiums and only 30 new landed property units launched, indicating a decline of 54% and 98%, respectively, compared to 2022.

However, there was an improvement in the number of newly launched units in the latter half of 2023 compared to the first half, particularly a significant increase of over 60% in the Hanoi condominium market a
nd an 11% increase in HCM City.

Mega-urban projects in the West and East of Hanoi and in the East of HCM City continued to dominate the market with the highest share of new supply in both cities, contributing more than 60% of new supply in Hanoi and nearly 80% of new supply in HCM City.

In terms of absorption rate, Hanoi and HCM City recorded more than 22,000 residential units sold (including both condominiums and landed properties) in 2023, but representing only half of the units sold in 2022.

However, there was an improvement in the absorption rate in the second half of 2023, thanks to the proactive efforts of developers. These efforts included implementing preferential sales policies such as extended payment schedules and offering discounts of up to 40% for early payment.

Additionally, positive macro factors such as declining interest rates have contributed to an improved sentiment among home buyers. As a result, the number of residential units sold in the last two quarters of the year helped increase
the sold units by more than 60% in Hanoi and doubled in HCM City compared to the first half of the year./.

Source: Vietnam News Agency