‘Astonishing’ condo value hikes in Hanoi, supply-demand imbalance, hypothesis guilty: professionals

Apartments in Hanoi have seen skyrocketing price increases in a very short time, with mid-range units deemed high-end now, industry insiders say.

At a recent seminar, Ho Thi Thu Mai, director of real estate website Nhaongay.vn, said that since August last year, transfer prices for apartments in Hanoi have seen explosive growth before stabilizing at high levels over the past few months.

She said that on average, apartment prices in the capital city have risen from around VND3 billion in mid-2023 to over VND5.5 billion ($222,672) at present.

“This is an astonishing price hike, reflecting unprecedented demand in the capital’s apartment market,” she said.

A survey by property website Batdongsan.com.vn in July revealed that the upward trend in Hanoi apartment prices was ongoing and gaining momentum.

In Nam Tu Liem district, prices of two-bedroom apartments at the Mon City project have increased from VND3.5-3.6 billion to VND3.7-3.9 billion ($157,895).

Similarly, prices of three-bedroom units at the Sudico My Dinh project have gone from VND4.4-4.6 billion to VND4.6-4.8 billion ($194,332). Vinhomes Smart City apartments have recorded an average rise of VND150-250 million ($10,121) per unit compared to two months prior.

In Hoai Duc district, the Gemek project has seen prices for two-bedroom units rise from VND2.7-2.8 billion to VND2.75-2.9 billion ($117,408). The Golden An Khanh project has reported an average increase of VND200 million ($8,080) per unit in just over a month.

In Cau Giay district, two-bedroom apartments at the Home City project are now priced at VND4.7-4.9 billion ($198,380), reflecting an average increase of VND200-300 million compared to nearly two months ago. Notably, those in the Nam Trung Yen urban area saw prices rise from VND2.8-3 billion to VND3.1-3.4 billion ($137,652).

Likewise, in Thanh Xuan district, two-bedroom units at the Gold Season project rose from VND4.2-4.4 billion in May to VND4.4-4.6 billion ($186,235). Average increases of VND250-300 million have also been seen in other projects like Thong Nhat Complex, Bohemia, Hanoi CenterPoint, Times Tower, and Golden Palace.

Mai attributed the soaring apartment prices in Hanoi to the scarcity of supply and increasing demand from buyers. Most newly launched projects are in the high-end segment, with primary prices continuously rising, further driving up transfer prices, she said.

“The real estate market in Hanoi, especially within the Ring Road 3 area, is facing a severe shortage of apartment supply. Even two-bedroom units priced below VND4 billion ($161,943) can now be counted on the fingers of one hand. Not only in central areas, but even in suburban districts, prices are rising sharply. Many projects that were once classified as mid-range have now been elevated to the high-end,” she added.

Market instability

Mai said that without decisive measures from the government and businesses to increase supply, especially in the social housing and affordable housing segments, the market will face serious consequences.

“People with real housing needs will struggle to own homes, and the price surge could lead to instability across the entire market.”

Meanwhile, explaining the price surge, Nguyen Van Dinh, chairman of the Vietnam Association of Realtors (VARS), noted that while there were normal supply-demand dynamics at work, speculators were also playing a role, creating virtual supply and demand to drive up prices in the resale market.

“Amid supply bottlenecks, individuals and businesses with available inventory have an advantage in setting prices. It is unavoidable that sellers raise prices when goods is scarce in the market,” he said.

He emphasized the need to increase supply from stalled projects and initiate new projects in order to stabilize apartment prices.

“Only by addressing this core issue can citizens gain easier access to land and housing.”