Vietnam condominium costs to stay emerging as call for outstrips provide

Apartment prices in major Vietnamese cities are expected to rise further this year as demand continues to outpace supply, industry insiders say.

Data compiled by real estate website Batdongsan.com.vn shows that as of June, the average real estate selling price in Vietnam had increased by 24% from the beginning of 2023.

The most vibrant segment in the first half of 2024 was apartments in Hanoi. Demand for apartments in the capital city peaked in March 2024, rising nearly 60% from the end of 2023. Apartments continued to have the best liquidity in the market, the website noted.

Another report by the Ministry of Construction has also indicated rising interest and searches for real estate information by customers and investors in the first half of this year after a gloomy period.

It said that 18 commercial housing projects were completed nationwide in H1/2024. During this period, there were 984 projects in progress and 23 that were newly licensed.

Corresponding figures for housing projects slated for land use rights were 32, 519 and 16.

The ministry also said that with high demand for apartments and limited supply, sharp increases in prices are likely in this segment.

Meanwhile, the Vietnam Association of Realtors (VARS) has echoed the forecast that in 2024, the apartment segment will continue to see high prices in both primary and secondary markets, particularly in big cities.

In Hanoi, apartment prices are expected to continue rising, with new projects priced below VND50 million ($2,010) per square meter becoming increasingly scarce. Asking prices are also climbing in the final stages of development due to a persistent shortage of supply, a VARS report said.

Vu Duc Huy, a real estate expert in Hanoi, said that in the past, most people believed apartments were not a profitable investment and that their value would decrease over time. However, this view has changed, and apartments have now emerged as a sustainable, profitable asset.

Moreover, renting out apartments has become an effective strategy for investors to generate a stable and regular monthly income, he added.

Huy also noted that population growth in major cities indicated a strong demand for apartments. Because demand has continued to outpace supply, apartment prices have risen sharply and will keep increasing this year, Huy predicted.

According to VARS, 27,335 realty projects entered the market in the second quarter of this year, 50% of which featured apartments. Of this, 60% were high-end apartment projects with prices of over VND50 million ($1,983) per sqm. Mid-end and affordable apartments accounted for just 14% and 7% of the supply, respectively.