Supply of apartments in Hanoi to increase in 2024

The year 2024 is predicted to present a bright picture as the supply of new apartments is expected to increase in Hanoi and Ho Chi Minh City - the two largest cities of Vietnam.

Hanoi is projected to offer nearly 16,000 new apartment units and over 6,000 low-rise houses, mainly from large-scale urban projects in the western and eastern parts of the city.

Local buyers attend a launch ceremony of an apartment building project. Photo: Tieu Thuy

In addition to Hanoi, CBRE also forecasts an increase in new supply in Ho Chi Minh City.

In Ho Chi Minh City, new supply is expected to be limited to over 9,000 apartments and 1,000 townhouses in 2024.

Assessing the market outlook, Duong Thuy Dung, Executive Director of CBRE Vietnam, said that interest rates are becoming stable and policy and legal factors are being revised to ensure consistency, which will contribute to the market's recovery this year.

Regarding the real estate market in 2024, the Vietnam Association of Realtors (VAS) said that confidence in the market will gradually recover as the positive effects of about 20 mechanisms and policies supporting the real estate market introduced in 2023 take effect.

In addition, record low deposit rates in 2023 have diverted a significant amount of funds into more attractive investment channels, including real estate. The approved general planning of many provinces in 2023 will help resolve some legal issues and create opportunities for project approvals.

The implementation of public investment projects, especially in transport infrastructure in certain localities and regions, will also contribute to the development of the real estate market, the VAS emphasized.

The association suggests that the frequency of new supply launches will be regular and higher compared to 2023. In addition to existing large suppliers, new developers will also contribute to the increased supply.

2023 housing market was bleak

An apartment building in Hanoi. Photo: Masteri West Height

A recent report published by CBRE on  the real estate market in Hanoi and Ho Chi Minh City reveals that the housing market in both cities faced several challenges in 2023.

In terms of supply, the two cities recorded the lowest total supply of new launches in the past decade. Hanoi saw a total of nearly 10,300 newly listed condominium units and 2,600 townhouses, a decrease of 32% and 84%, respectively, compared to 2022.

Meanwhile, Ho Chi Minh City had a more modest supply of over 8,700 condominium units and only about 30 newly listed townhouses, down 54% and 98% year-on-year, respectively.

Compared to the first half of 2023, the supply of new launches improved in the second half, particularly in Hanoi's condominium market, which saw an increase of more than 60%.

Ho Chi Minh City saw a slight improvement in new supply during the period, increasing by 11% compared to the first half of 2023. Large-scale urban projects in the western and eastern parts of Hanoi, as well as in the eastern region of Ho Chi Minh City, continue to dominate new supply in both cities, contributing more than 60% of the housing supply in Hanoi and nearly 80% of the new housing supply in Ho Chi Minh City in 2023.

In terms of absorption rate, the CBRE report indicates that Hanoi and Ho Chi Minh City recorded over 22,000 homes sold in 2023, about half the number of units sold in 2022.

However, the absorption rate showed more positive signs in the second half of 2023, thanks to flexible initiatives by local developers, including the implementation of favorable policies such as extended payment schedules and high discounts of up to 40% for early payments, the report said.

In addition, the drop in interest rates and improved buyer sentiment also contributed to a more than 60% increase in the number of homes sold in the last two quarters of the year in Hanoi and a doubling in Ho Chi Minh City compared to the first half of the year.