Primary Prices Increased for 18 Consecutive Quarters 

According to Savills Market Report in Q2/2023, new supply increased by 76% quarter-on-quarter (QoQ) and 125% year-on-year (YoY) with 3,596 units. Primary stock of 20,412 units increased by 5% QoQ and 14% YoY. Conversely, there were no new villa and townhouse projects and only 126 new dwellings entered from two existing projects.  

Primary apartment asking prices of VND 53 million/m2 net sellable area (NSA) increased by 1% QoQ and 17% YoY. Primary prices have increased for eighteen consecutive quarters and are 73 higher than in Q1/2019. Do Thu Hang, Senior Director of Advisory Services, Savills Ha Noi pointed out that prices continue to rise because of increasing land and construction costs, infrastructure development and quality improvements. 

However, villa and shophouse prices fell slightly QoQ. Primary villa prices fell by -10% QoQ to VND 100 million/m2 LA with the entry of new affordable products and low-priced inventory in Me Linh District. Shophouse prices decreased by -7% QoQ, while townhouse prices improved by 4% QoQ to VND 137 million/m2 LA.   

Do Thu Hang said: “Landed property prices fell slightly because projects far from the city centre had more affordable prices and lowered the average. However, landed property prices remain high, especially for developments close to Ring Roads 2 and 3 because these areas boast solid planning, transport infrastructure and high population densities.”  

Income Growth vs Price Increases 

Long-term housing demand remains high with positive net migration, population growth and rising urbanisation. Between 2003 and 2025, Ha Noi will have 157,000 new households. However, only 59,000 units (all grades), 9,000 landed properties and 18,700 social housing units are expected; therefore, a shortfall of 70,300 units exists.  

Within high demand and rising property prices, questions of affordability are top of mind. Ha Noi aims to achieve a per capita income of VND 150 million/person/year in 2023, which reflects a 6% per annum (pa) increase since 2019; however, apartment prices have increased by 13% pa between 2019 and H1/2023. 

Hang noted: “Income per capita growth in Ha Noi is lower than the growth of apartment prices. This is an example to see how people's homeownership will be longer if this gap is widened. If the gap is not narrowed, it will make homeownership more difficult, for people in general and particularly for people living in Ha Noi or people from other regions who want to have a house in Ha Noi to work or for the long-term benefit of their children. For landed properties, buyers must assess if high prices truly reflect the quality and value of a property, which means prolonged purchasing decisions and a slow market.”  

For landed properties like villas and townhouses, dwellings with reasonable prices and well-planned projects still attract buyers.  Sales improved in Q2/2023 to 106 dwellings, increasing by 20% QoQ. “In Q2/2023, dwellings with primary prices below VND 10 billion had a 39% share of sales, dwellings between VND 10 billion to VND 20 billion had a 28% share and dwellings of over VND 30 billion had a 13% share. The data shows that affordability supports absorption,” Hang added.   

Given difficulties in the primary market, the secondary market appeals to buyers given greater choice, reasonable prices and guaranteed legal compliance. For landed properties, secondary products cost -20% less than those in the primary market. Although dwellings are not brand new, they are, however, ready for buyers to move in.  

Ha Noi has accelerated the disbursement of public investment, which will support development in general and should spur sectors like real estate. Construction recently started on Ring Road 4, which is expected to boost development in suburban areas (Me Linh, Dan Phuong, Hoai Duc, Ha Dong, Thanh Oai, and Thanh Tri). When Ring Road 4 opens in 2027, residential stock in these areas is forecast to increase by 36% compared to current levels.   

Synchronised infrastructure will help spread demand throughout the city. With convenient transportation, people will be willing to move to areas with more reasonable prices. This is forecast to solve the issues of high prices in the city centre and areas close to Ring Road 3, which has lowered affordability.  

To learn more about residential development in Ha Noi, contact Savills Advisory Services or Do Thu Hang, Senior Director of Advisory Services, Savills Ha Noi.