- The apartment market in Ha Noi has seen growth in both supply and number of transactions, with the Grade B segment dominating. However, the gap between household incomes and housing prices continues to widen, posing challenges for potential homebuyers.
- The villa and townhouse market in Ha Noi saw an increase in supply, particularly in suburban areas. Absorption rates rose by 30 percentage points compared to the previous quarter. Primary prices decreased due to the new supply being located further from the city centre.
The majority of apartments sold were Grade B
In the first nine months of 2024, the Ha Noi apartment market saw over 12,000 new units launched. In Q3/2024, 5,265 new apartments were offered, representing a significant increase of 95% quarter-on-quarter (QoQ) and 178% year-on-year (YoY). The Lumi Ha Noi and QMS Top Tower projects launched 3,488 units, accounting for 66% of the market share, with the remaining 34% coming from the next phases of four existing projects.
However, primary supply is still down 47% compared to the same period last year. Although the primary supply remains limited, 6,840 apartments were sold in Q3, marking a 35% increase from the previous quarter and a 226% rise YoY. The total number of apartments sold in the first nine months of 2024 reached 17,000 units, which is only slightly lower than the 2019 figure, and higher than the 2020 level when the market was affected by the COVID-19 pandemic.
Most of the new supply continues to belong to the Grade B segment, focusing on large projects in the East and West of Ha Noi. Nam Tu Liem and Cau Giay accounted for 63% of the primary supply and 78% of transactions in the quarter. 92% of the West area’s supply is Grade B apartments. The West area will supply 21,000 apartments from 28 projects, approximately 17% of future supply.
Regarding prices, Ms Do Thi Thu Hang, Senior Director of Research and Consultancy at Savills Ha Noi, said that the housing price in Ha Noi continues to rise. The primary selling price is currently at VND 69 million/m², a 6% increase from the previous quarter and a 28% rise YoY.
In the secondary market, the average price of apartments in Q3 was VND 51 million/m², up 10% compared to the previous quarter and 41% from the same period last year. The secondary market has seen an average price increase of 17% annually since 2020, with Grade C increasing the most at 20% per year, followed by Grade A at 16% and Grade B at 15% per year. Many buyers have shifted from the primary to the secondary market due to a wider range of choices and more reliable legal status.
In this context, Savills expert evaluates: "Although the market is growing, the gap between household income and housing prices is becoming more and more evident. The average income of a family in Ha Noi is about VND 250 million/year when the price of an average apartment is around VND 4 billion, meaning that people need 18 years of savings without spending to be able to buy a home. While the average income grows only 6% annually, the prices in the secondary market have increased by 17-20%, making it difficult to purchase homes."
Entering Q4/2024, the market is expected to see an additional 9,700 new apartments, with 88% coming from the next phases of large projects. From 2025 onwards, around 110,000 units from 106 projects will be launched. The grade B segment will continue to lead with 54% of future supply. Dong Anh, Hoai Duc, Gia Lam, and Hoang Mai will contribute to 62% of the market share.
Ms Hang added: "The resolution of legal issues is gradually improving, opening up opportunities for new projects to be launched. However, this process will be gradual and unlikely to immediately meet the diverse product demands of the market. The trio of laws - Land Law, Real Estate Business Law, and Housing Law - being applied soon, along with related guiding documents, will continue to positively impact the market, though this process will not happen quickly."
Villa/Townhouse Supply Concentrates in Suburban Areas
In Q3/2024, the new supply reached 176 units, a 38% increase compared to the previous quarter. New supply came from three existing projects: Thanh Lam Dai Thinh 2 in Me Linh, Solasta Mansion in Ha Dong, and Him Lam Thuong Tin in Thuong Tin, which launched new shophouses.
The primary supply reached 673 units from 15 projects, up 11% from the previous quarter but down 7% YoY. Villas and townhouses dominated, each accounting for 38% of the primary supply.
These projects have lower selling prices due to their locations far from the city centre, and the primary prices in Q3/2024 showed a declining trend compared to the previous quarter. Specifically, the major primary supply was concentrated in suburban projects such as Thanh Lam Dai Thinh 2 and Him Lam Thuong Tin. The primary price of villas dropped by 16% QoQ to VND 150 million/m² of land, townhouses dropped by 17% to VND 156 million/m², and shophouses fell by 14% to VND 249 million/m².
Meanwhile, the secondary market has recorded consistent price increases, both compared to the previous quarter and the same period last year. This signals that villas and townhouses are still considered attractive options for investors in the secondary market.
The secondary price of villas is 13% higher than the primary price, rising 3% QoQ to VND 169 million/m² of land. The secondary price of townhouses rose 4% QoQ to VND 187 million/m², which is 20% higher than the primary price.
Savills expert noted: "Despite fluctuations in supply and prices, the villa and townhouse market in Ha Noi in Q3/2024 has seen many positive signals, with absorption rates reaching 48%, up 30 percentage points compared to the previous quarter and YoY." This growth was partly driven by strong transactions at the Thanh Lam Dai Thinh 2 project, which sold 85% of the new supply launched and accounted for 37% of the transactions in the quarter in Ha Noi. Projects like An Quy Villa, Solasta Mansion, and Him Lam Thuong Tin also contributed to this improvement.
Projects in suburban areas like Ha Dong, Me Linh, and Thuong Tin have high demand. Me Linh led primary transactions with 37%, followed by Ha Dong at 33% and Thuong Tin at 12%.
Savills forecasts that absorption will continue to shift as infrastructure for the Vinhomes Global Gate project is expected to be completed. Contracts are expected to start to be signed around October 2024, offering 2,599 units to the market.
Three projects will offer a total of 2,975 units in the next quarter. Him Lam Vinh Tuy is a new project that will offer around 147 units, and Solasta Mansion will launch more units. Dong Anh district will account for most of the future supply with 19%, followed by Me Linh district with 16% and Ha Dong district with 15%.
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