Hanoi real estate: Center holds prices, suburbs await adjustment

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From now until the end of 2025, the supply of apartments offered for sale in the Hanoi market will still mainly concentrate in the A and B segments; product diversification is still limited.

Ms. Do Thu Hang - Senior Director of Research and Consulting Services, Savills Hanoi analyzed that from 2026 onwards, when pilot projects complete legal procedures, new supply in Hanoi will increase sharply. It is expected that in the period of 2026-2027, the Hanoi market will receive about 46,600 apartments from 43 projects, but most of them are located outside the central area. This may create pressure to adjust prices, but according to Ms. Hang, the adjustment will only occur in areas with abundant land funds and unsynchronized infrastructure.

“As for projects with strategic locations, in belt 2 and belt 3, developed by reputable investors, prices are likely to remain stable or increase slightly thanks to scarcity and real demand. In general, instead of a wave of price reductions across the market, we will witness a clear differentiation by area and project quality,” Ms. Hang shared.

To both improve housing supply and bring housing prices to a level suitable for people's affordability, Savills experts believe that, in general, Hanoi is synchronously implementing many solutions such as institutional reform, infrastructure development, and piloting housing projects... Notably, many projects are being considered for implementation in areas outside the 3 - 3.5 belt. When the procedures are completed and the products are launched on the market, it will have a positive impact on the price level.

However, experts also recommend an important factor: land use costs. This factor currently accounts for a large proportion of the total cost. If this cost is calculated reasonably, ensuring the harmony of interests between the State and enterprises, housing prices can be reduced to a level more suitable to people's ability to pay.

At the same time, preferential mechanisms on tax, credit or land for the affordable housing segment are also necessary to promote the development of this product line.

Dr. Nguyen Van Dinh - Chairman of the Vietnam Real Estate Brokers Association also pointed out that the shortage of housing supply, especially affordable housing, is an inevitable consequence of the unbalanced development process over many years. Land incentive policies and investment procedures need to focus on investors building housing for people with real needs instead of just focusing on high-end projects.

With the trend of Hanoi promoting the development of public transport and limiting personal vehicles in the inner city, experts predict that it may also impact the real estate market, especially in the central area, but not entirely negatively.

This is a comprehensive urban transformation process. When the policy of regulating personal vehicles is implemented, it will certainly affect the accessibility of central areas. However, this does not mean that it will have a direct negative impact on the real estate market.

The nature of real estate is closely linked to the need for use, in which housing is always an essential need. Although the means of transportation change, people will still find ways to access the necessary areas through many different options.

Currently, the market is still in the stage of observing and analyzing the impact of changes in infrastructure and traffic. According to Savills' assessment, in some areas such as the old quarter, if oriented and exploited effectively for purposes such as tourism and commerce, the value of real estate can be completely maintained, even increased.

Housing demand is still very high in large cities like Hanoi. Therefore, even in the context of changing means of transport, the real estate market still has a self-adjusting and adapting mechanism to serve this need. However, because this is a complex process with many related factors, it is necessary to continue to monitor and evaluate in the coming time, instead of drawing early conclusions about the direct impact on real estate values at the present time - Savills experts analyzed.

Another trend that is being noticed today is that although foreign investors are showing interest in residential real estate, FDI in this segment has not really exploded. Explaining this, Ms. Do Thu Hang analyzed that Vietnam's fundamental factors are very attractive in the eyes of foreign investors, including a young population, rapid urbanization, rising income, and positive economic prospects. Savills' observations also show that foreign direct investment in residential real estate has a clear presence in Hanoi, Ho Chi Minh City, Hai Phong...

However, to attract FDI into the housing segment to develop more strongly, it is necessary to shorten and make more transparent the licensing and project approval process. The speed of investment procedures is the biggest competitive advantage to retain and attract international capital flows.

Since the beginning of the year, the Hanoi real estate market has recorded signs of recovery with improved supply but the price level is still at a high level. Important laws on land, housing, and real estate business have been issued and will take effect from August 2024. However, to apply synchronously and effectively in practice, it still takes time for the full issuance of guiding documents and specific implementation.

Currently, many projects are entering the stages of legal completion, design approval, financial obligations, etc. These steps require time to ensure transparency and proper procedures. Although the progress has been accelerated, there is still a delay for the actual supply to enter the market.

According to Associate Professor Dr. Tran Kim Chung - Former Deputy Director of CIEM (Central Institute for Economic Management), real estate prices are no longer driven by real demand but are largely driven by input costs, especially land costs and time to complete procedures. If the State does not have strong measures to reduce delays in project approval, housing prices will have little chance of decreasing, even when supply improves.

Source: https://vtv.vn/bat-dong-san-ha-noi-trung-tam-giu-gia-vung-ven-cho-dieu-chinh-100250926162302526.htm