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Decoding The Hanoi Real Estate Market: Price Trends and Predictions

Posted by Khoi Pham on August 9, 2023

Decoding The Hanoi Real Estate Market: Price Trends and Predictions

The Hanoi real estate market has been a hot topic for investors, both local and international, due to its steady growth and promising future. This article aims to decode the Hanoi real estate trends and provide some Hanoi property price predictions based on the current market analysis.

Hanoi Real Estate Trends

The Hanoi real estate market has shown remarkable resilience and growth over the past few years. Despite the global pandemic and other economic challenges, the housing market remained strong in 2022, with robust price growth observed over the first eight months of the year [1]. 

In the first half of 2022, some 8,200 new apartments from 16 projects have been listed on the market, representing an increase of 3% year-on-year [2]. However, the supply of budget housing projects remains scarce, pushing the prices of upmarket houses to remain high [2].

hanoi real estate market

The Hanoi real estate market has shown remarkable resilience and growth over the past few years

In 2022, Hanoi saw the launch of around 15,100 condominium units, a 12.3% decrease from the previous year. This marked the third consecutive year of declining new supply, largely due to factors such as COVID-19, credit tightening, and licensing issues [3]. But here’s the twist – despite the decrease in supply, the number of sold units in 2022 remained relatively positive, reaching 16,600 units, exceeding the new launch [3].

Now, let’s talk about prices. The primary prices of Hanoi condominiums averaged US$1,934 per square meter by the end of 2022, a whopping 21.2% increase from the previous year [3]. This price surge was due to a higher share of high-end products in the total stock available for sale.

But here’s the catch – while housing prices have been skyrocketing, income growth has been lagging behind. Since 2019, housing prices in Hanoi have grown at twice the rate of people’s incomes [4]. This gap has limited many people’s ability to buy a house, creating a challenging scenario for potential homebuyers.

Despite these challenges, the fundamentals of Hanoi’s real estate market remain solid. The rapid urbanization process has led to high demand for housing and real estate investment [5]. This demand is expected to continue growing, presenting a favorable outlook for the real estate market.

Hanoi Property Price Predictions

The city’s residential real estate market is expected to grow from a whopping USD 22.44 billion in 2023 to an impressive USD 40.53 billion by 2028, marking a compound annual growth rate (CAGR) of 12.55% during this period [6]. This growth is fueled by rapid urbanization, economic development, and a surge in the middle-class population, all of which are creating a high demand for residential properties.

Hanoi real estate market contributes to the growth of Vietnam residential real estate market

Hanoi real estate market contributes to the growth of Vietnam residential real estate market

In 2022, the primary selling price for apartments in Hanoi was VND50 million (US$2,132) per square meter, marking a 10-15% increase from the previous year [7]. However, the market has seen a slowdown in transactions due to high prices and tightened credit conditions. But don’t worry, this doesn’t mean that the property prices will plummet. In fact, the experts at VARS predict that if the economy shows signs of improvement, prices could go up. And if the supply of affordable apartments remains insufficient, their prices will not fall and may even increase [7].

As for villas and townhouses, the market has been quiet with the fewest transactions in five years. Despite this, prices have remained firm. Primary villa prices decreased by 6% quarter-on-quarter to VND 130 million/m2, while townhouse prices decreased by 1% to VND 172 million/m2 [8]. But don’t let these figures fool you. The secondary market saw price increases in 2022, driven by urban districts with limited supply [8].

In conclusion, while the Hanoi property market may seem a bit sluggish now, it’s far from stagnant. With the economy set to grow by 6.5% in 2023 [9], the future of the property market looks promising. So, whether you’re a first-time buyer or a seasoned investor, keep your eyes on the prize because Hanoi’s property market is set to offer some exciting opportunities!

Government Policies and Their Impact

The Vietnamese government has been proactive in shaping the real estate market. In 2023, new resolutions and decrees related to the real estate market are expected to come into effect [10]. These policies aim to promote the real estate market safely and sustainably, and they are expected to have a significant impact on the market. The prime minister has also requested the State Bank of Vietnam to direct, coordinate, and guide localities and commercial banks to lend and disburse quickly, with the correct focus and subjects for loans and disbursements [10]. 

Foreign Investment in Hanoi’s Real Estate Market

Foreign investment in Vietnam’s real estate market has been increasing. The influx of foreign capital has provided an important catalyst for Vietnam’s economic growth [11]. The Vietnamese government predicts that the number of upper-income households in Vietnam will rise from 250,000 in 2016 to 530,000 in 2020, which could further stimulate the real estate market [11].

Hanoi Real Estate Market Analysis

The Hanoi real estate market is expected to undergo significant changes in 2023 due to new resolutions and decrees related to policies for the real estate market [10]. These new policies are expected to make the market, investor fundraising, and real estate dealings more transparent, leading to more sustainable market development in the future [12].

In conclusion, the Hanoi real estate market is showing promising signs of growth and development. While the rising prices pose a challenge, the new policies and regulations are expected to bring about positive changes in the market. Investors should keep a close eye on the Hanoi real estate trends and make informed decisions based on the thorough Hanoi real estate market.

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