Hanoi sees more premium apartments as lower-priced supply remains scarce

Last week Singaporean property giant CapitaLand broke ground on a 2.1-hectare apartment project with 2,150 premium units in a major urban area in the east of the capital.

The preliminary price announced by the developer to gauge market interest was around VND68 million per square meter, meaning a two-bedroom unit would cost about VND5.5 billion.

Earlier, in March, the firm had launched another premium apartment project with most units costing more than VND70 million per square meter.

Property developer Masterise Homes recently unveiled a similar project in the Vinhomes Global Gate development in Dong Anh District on the outskirts.

Units there are currently the most expensive in the area at VND100-130 million per square meter.

A few other projects in the western part are also selling at prices exceeding VND120 million per square meter.

Meanwhile, low- and mid-range apartments costing VND50 million or less per square meter remain scarce in Hanoi, with almost none available in the primary market.

Property consultancy Savills said only 1% of apartments are now priced at VND2 billion or less, indicating severe imbalance in supply.

Nguyen Van Dinh, president of the Vietnam Association of Realtors, said most of the new supply in the market consists of high-priced units targeting wealthy investors while low-priced ones, which should be the most common because they meet the housing needs of the majority, are increasingly scarce with no new projects in sight.

Progress in developing social housing, which could help low-income workers, is tardy, he added.

According to the Ministry of Construction, Hanoi needs to build 18,700 units by 2025, but so far only five projects with 5,200 apartments have been completed and three others with 1,700 units are currently underway.

Earlier this year Tran Sy Thanh, chairman of the city People’s Committee, had called for breaking ground on at least one new social housing project before October, but this has gone unheeded.

Dinh said developers are focusing on premium housing to maximize profits as costs, especially of land, are rising.

CBRE, another real estate consultancy, said many new projects are in urban areas where existing supply is expensive, meaning the former are unlikely to be priced cheaper.

Housing supply in Hanoi is forecast to increase in the coming years, but the share of premium apartments is unlikely to decrease.

Market research firm OneHousing predicted that the city would see 23,000 new units in 2025 and 24,000 in 2026, mostly premium ones in the western and eastern areas.