- In 2024, the real estate market saw a positive recovery driven by changes in the legal framework. As a result, this year is viewed as a foundational period for a new development cycle in the market. This new phase is expected to boost competition among residential products while encouraging significant consolidation among developers.
Growth in Housing Supply, Prices, and Transactions in Ha Noi
Throughout 2024, Ha Noi housing market saw strong buyer interest, particularly in the for-sale apartment segment.
By the end of Q1/2024, the approval of amendments to the Law on Real Estate Business, the Land Law, and the Housing Law brought positive momentum to the market. These changes prioritised buyer protection and increased transparency in market activities, encouraging the relaunch of apartment and villa-townhouse projects. As a result, supply for these segments grew by 99% and 221% year-on-year (YoY), respectively, with transaction volumes and prices rising across both the primary and secondary markets.
The recovery momentum continued in Q2 and Q3/2024. Notably, this period also saw the early implementation of real estate-related laws, including the 2024 Land Law, the 2024 Housing Law, and the Law on Real Estate Business, further reinforcing investor confidence in the real estate sector.
In Q3, the apartment segment led the market, with supply surging by 95% quarter-on-quarter (QoQ) and 178% YoY. Sales volumes increased by 35% QoQ and 226% YoY. Apartment prices also rose significantly, reaching VND 69 million/m² in the primary market and VND 51 million/m² in the secondary market, setting a new pricing benchmark for the capital market.
In response to the market's revival, many developers accelerated the launch of new projects in Q4/2024. Do Thi Thu Hang, Senior Director of Advisory Services at Savills Ha Noi, stated that the substantial demand for housing and increased supply will lead to a continued YoY increase in transaction volumes in Ha Noi in Q4/2024.
Over the past year, apartments have also emerged as a store-of-value asset. According to Hang, while buyers previously purchased apartments solely for personal use or rental investment, they now also expect price appreciation.
“This expectation is well-founded, as apartments offer rental yields and capital gains. In the context of high prices for low-rise housing, including villas, townhouses, and shophouses, apartments have become an attractive investment option, drawing significant attention from investors,” Hang commented.
A New Cycle of Significant Market Purification
Following the positive developments of 2024, the real estate market in Ha Noi and across the country is expected to enter a new development cycle in 2025. According to Hang, after each cycle, the market is upgraded to become more professional and cohesive compared to the previous one. This cycle is expected to focus on sustainable development, driven by strengthening the legal framework and robust macroeconomic growth.
Key real estate laws, including the Real Estate Business, Land, and Housing Law, were approved and enacted earlier than expected in 2024. The recent approval of the Ha Noi Capital Planning for 2021-2030, with a vision for 2050, has provided a more precise direction for urban development, benefiting citizens and investors.
Additionally, the new land price framework has raised significant expectations. Removing the land price cap and adjusting land prices based on market mechanisms will not only impact real estate prices but also directly affect market participants, from landowners to developers and project companies. Effective immediately at the end of the year, the newly issued land prices will provide developers with a clearer outlook, allowing authorities to make crucial calculations for project development in 2025.
"In this new market cycle, improving the legal framework will foster greater competition, leading to a market clean-up of products and developers. In the past, developers only needed capital and a project to enter the market, but now they must build their reputation, experience, and financial strength to develop projects," Hang stated.
A key difference in this cycle is the direct involvement of foreign investors. Previously, foreign investors were mainly able to explore the market; however, they are now more actively participating through investment partnerships with major domestic developers. This is expected to address previous challenges related to foreign capital mobilisation. As a result, foreign investors will play a more profound and broader role in the market, diversifying their investment segments. Moreover, the financial strength from these partnerships will upgrade the existing market, making it more challenging for smaller investors to enter.
Regarding products, Hang noted that each market will feature distinct product lines in the new cycle. Developers must focus on customer satisfaction as the key criterion for product development, including for Grade C apartments and social housing.
"For instance, in the Ha Noi market, the Capital Law 2024, the Ha Noi Capital Planning for the 2021-2030 period, with a vision for 2050, outline the goals for developing the capital as “Cultural - Civilised – Modern." Real estate products in the coming years in Ha Noi must consider the regulations outlined in these documents, contributing to beautifying the urban landscape and improving the quality of life. They must also align with the goals of the housing development programme, particularly in terms of average living space per capita," Savills expert said.
Hang further stated that Grade B apartments will continue to dominate the Ha Noi market in 2025, with an improved supply of Grade C apartments and social housing.
The upcoming housing supply will come from major developers in large urban areas outside the city’s inner ring, offering projects with legal compliance, quality, full amenities, and sustainability standards. New supply trends with more affordable prices may also focus on areas adjacent to Ha Noi, where land prices in the inner city and surrounding ring areas are relatively high
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