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Oct 20, 2023 / 07:47

Hanoi apartment supply hits 10-year low

Hanoi's increased housing supply in the third quarter of 2023 compared to the previous quarter did not improve the city's cumulative total supply in the first nine months of the year.

According to CBRE Vietnam's latest survey, the supply of residential units in Hanoi will be the lowest in the past 10 years.

 This year saw the listing of Capital Elite, a luxury project in Hanoi. Photo: Capital Elite

Total residential supply in Hanoi reached 6,925 units in the third quarter of 2023, down over 40% year-on-year. More than 90% of the new supply in the third quarter was in the high-end segment, with the majority being developed in large urban areas in Nam Tu Liem and Gia Lam districts.

West Hanoi continues to have the largest supply of residential units in the city, with new launches accounting for nearly 62% of total supply in the third quarter. The remaining projects with new units for sale are located in eastern Hanoi, including Hung Yen, a province adjacent to the capital.

However, the Hanoi condominium market has seen an improvement in the absorption rate, with approximately 3,640 units sold in the third quarter.

The number of units sold has increased by more than one and a half times compared to the previous quarter and is almost the same as last year.

A total of more than 7,900 condominium units were sold in Hanoi over the past three quarters, concentrated in projects developed in major urban areas in the west and east.

Since the third quarter, many developers of condominium projects in Hanoi have offered significant incentives, such as high direct discounts of up to nearly 15% for early payment or loans with 0% interest rates for up to eight years, to accelerate the sales pace of their projects.

Currently, the average selling price of condominiums continues to rise, with an increase of nearly 7% per quarter and 14% per year, reaching VND50.8 million (US$2,087) per square meter (excluding VAT and maintenance fees).

The main reason for the price increase is the large proportion of new supply in the high-end segment this quarter (over 90%), resulting in a shortage of lower-end units. In addition, some developers have adjusted prices and released additional units on higher floors, contributing to the increase in the average primary price of condominiums in Hanoi this quarter, as analyzed by CBRE experts.

The average selling price of the secondary market continues to rise from the previous quarter, reaching approximately VND32 million ($1,314) per square meter, an increase of 2.7% per quarter and 0.8% per year.

All districts recorded an increase in secondary prices compared to the previous quarter, with Dong Da, Thanh Xuan, Tay Ho, Nam Tu Liem and Gia Lam districts recording an increase in secondary prices of over 3%.

Hoai Duc and Bac Tu Liem districts have the highest increase in secondary prices, with 8% and 5%, respectively, year on year.

Forecasting the fourth quarter of 2023, CBRE experts believe that the new supply of apartments will continue to increase with over 4,500 units for sale, bringing the total new supply for 2023 to 11,400 units.

The new units in the fourth quarter are expected to come from some projects listed for the first time and subsequent phases of existing projects in the western, eastern and northern regions of Hanoi.