New apartments at below $2,000 per sq. m becoming scarce in Hanoi

Tung Lam, 32, of Hoai Duc District has been consulting real estate brokers and searching for apartment projects to be launched soon.

He and his wife have VND1.8 billion in savings and plan to borrow VND600 million to buy a two-bedroom apartment at around VND45 million per square meter.

But the engineer could not find one since the price of even smallish apartments was higher.

His broker then introduced a new project on National Highway 32 that costs around VND46 million per square meter. But at that price the units are all three-bedroom apartments measuring over 100 square meters, meaning a cost of around VND5 billion.

The broker explained that only large units are available at less than VND50 million because their higher prices make them harder to sell. Two-bedroom units in the project had been sold out at VND53-55 million per square meter.

Lam turned his attention to Tay Mo Ward in Nam Tu Liem District, where many apartment projects have recently been launched, and found prices there were well above VND60 million.

Thu Huyen, 35, faced similar difficulties finding a new affordable apartment even in places far from the city center like Gia Lam District.

Earlier this month she heard that some new projects in a large urban area in the capital’s east had started accepting bookings at VND55 million per square meter.

She quickly contacted an agent to look for a two-bedroom apartment, but was told there were already too many bookings for them, and he could not guarantee she would get one.

Nguyen Van Dinh, president of the Vietnam Association of Realtors, said new apartments priced at under VND50 million per square meter have become scarce.

At the end of the second quarter the average primary market price in Hanoi was around VND60 million.

A real estate trading floor in Gia Lam District said even in western districts, well away from the downtown area, prices at some places have exceeded VND100 million.

According to Pham Duc Toan, CEO of real estate agency EZ Property, high prices that used to be seen primarily in central districts like Tay Ho and Ba Dinh are now also prevalent in distant areas.

New apartments in the capital are becoming more expensive due to high demand for housing and a decline in supply, especially of affordable units priced at below VND30 million per square meter.

A report from property market research firm OneHousing said Hanoi has not seen any new affordable apartment built in the last eight quarters.

The premium segment costing VND50-80 million per square meter accounts for 61% of the new supply this year, it said.

The luxury segment priced at above VND80 million per square meter makes up 36% and the remaining are mid-priced at VND30-50 million, it added.

Property consultancy Savills said the number of affordable units in the market has been declining by 45% a year since 2020 while housing demand remains high.

Hanoi is projected to require 185,200 housing units by 2025, nearly 90% of them being apartments, it said.

Based on that, Dinh of the Vietnam Association of Realtors said the city is likely to experience a shortage of around 50,000 apartments next year.

Toan said since the high-end segment accounts for a majority of the units in the market, property developers have the power to jack up prices.

This poses a challenge for people looking to buy mid-priced apartments, not to mention affordable ones, he said.

For young families with a budget of under VND2 billion, the only option is to move away from central districts and accept a longer daily commute.

Savills expected around 13,460 mid-priced units to enter the market in the second half, 93% of them in Nam Tu Liem, Ha Dong and Gia Lam districts.