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Hanoi’s new apartment launches lowest in five years

By Dat Nguyen   April 24, 2020 | 12:57 am PT
Hanoi’s new apartment launches lowest in five years
Apartment buildings in Nam Tu Liem District, Hanoi. Photo by Shutterstock/TuananhVu.
Hanoi launched 4,800 new apartments in Q1 2020, the lowest in five years as the coronavirus pandemic delayed developers’ plans.

The city’s apartment supply fell 19 percent year-on-year to 27,900 units, with 73 percent of them in the Grade B segment, according to a recent report by real estate service firm Savills.

Sales fell 50 percent to 4,900 units, and absorption rate dropped 11 percentage points to 18 percent as local buyers avoided crowded sales events and travel bans limited foreign purchases.

Prices, however, went up 10 percent to $1,460 per square meter. The Savills report anticipated that the outbreak will not result in sharp price drops, unless the current situation continues in the second half of the year.

Grade B saw lower price growth at 5 percent as developers faced severe competition due to abundant supply, while Grade C had the highest absorption of 20 percent, fueled by increasing demand for affordable units.

Accommodation demand is set to rise as Hanoi’s population growth is higher than the national average and its ratio of people living in apartments, 12.9 percent, is highest in the country.

Do Thu Hang, director of Savills Hanoi, said: "We may see a recovery in launches over the second half accompanied by a big push by developers to catch sales targets."

An estimated 39,600 units from 28 projects are set to enter the market this year, the report said.

 
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