Vietnam Q3 housing provide surges 60%, inexpensive housing shortage stays

Housing supply in Vietnam fell 25% quarter-on-quarter to 22,412 units in Q3/2024, but the number marked a 60% increase year-on-year, according to a report by the Vietnam Association of Realtors (VARS).

In the first nine months of 2024, a total of 38,797 new units were put up for sale. Of these, 70% were apartments, predominantly those priced at over VND50 million ($2,004) per square meter.

The report notes that the supply was mainly focused on high-end apartments, with the market nearly void of affordable options. The northern region led the supply, accounting for 46% of the new units, followed by the central region at 29% and the remaining 25% coming from the south.

Q3 transaction volume and absorption rate declined by 25% and one percentage point, respectively, from Q2, but were up 80% and 28 percentage points from the same period last year.

Apartment transactions comprised 71% of the total in Q3, with new apartment projects experiencing an average absorption rate of 75%. Some projects in Hanoi even recorded an absorption rate of 90%.

Overall, the housing market registered 30,589 transactions during the nine-month period, 2.5 times year-on-year.

‘Exceptionally’ high prices

The apartment segment continued to see high price levels with high rising construction costs and demand significantly outstripping supply, said Pham Thi Mien, deputy head of market research and investment promotion at VARS.

The average selling prices of primary properties in Q3 remained “exceptionally high.”

In Hanoi, selling prices for apartments in Hanoi approached VND60 million ($2,410) per square meter in the third quarter, up 64% from Q2/2019, according to a separate report covering 150 selected apartment projects nationwide.

In Ho Chi Minh City, prices rose from VND49.2 million ($1,970) to VND64.2 million ($2,570) per square meter, an increase of 30.6%. In Danang city, selling prices soared by 46.2%.

Commenting on the property market, Mien said that the demand for real estate – covering both housing and investment needs – continued to shift toward suburban areas and localities adjacent to Hanoi and HCMC.

This trend was also evident in the secondary market, where numerous options were available at more affordable prices. In particular, apartments and houses priced under VND3 billion ($120,390) were highly sought after in these two cities, she said.

Based on Q3/2024 data, VARS held that the real estate market was in a transitional phase, highly sensitive to both positive and negative influences. Slight growth in certain segments could generate a strong recovery momentum, provided supportive factors such as policies, infrastructure and financing were in place.

If not addressed early, the rising real estate prices could lead to significant consequences for both the market and society, the report cautioned.

It recommended that the government take measures to support affordable commercial housing projects and social housing at the earliest.