Hanoi small apartment prices shoot up by 30% in 2024

Phuong Thao, 32, an office worker, has been talking with several real estate brokers to find a 50-55 sq.m two-bedroom apartment in Nam Tu Liem District but has yet to find one within her budget of VND2.4 billion (US$97,500).

"It is hard to find even a one-bedroom unit for less than VND2.5 billion," she says.

In the Tay Mo urban area, she noticed that some units measuring 43-47 square meters are priced at VND55-56 million per square meter, 25-30% higher than when she first saw them a year earlier.

Borrowing VND400-800 million to buy a two-bedroom apartment is beyond her means since her budget already includes a VND500 million loan, she says.

But she fears it is now or never since even smaller units like studios and one-bedroom apartments will be difficult to buy in future.

Vo Huy of Gia Lam District says he was surprised when a broker offered VND56.3 million per square meter for his 32 sq.m studio apartment, nearly double the price he paid for it two years ago.

A 28 sq.m apartment in his floor sold for VND53.6 million per square meter last month, 30% more than at the beginning of the year.

While selling his unit seems like a lucrative deal, he is concerned that buying a slightly larger unit will cost him the entire sale amount plus an additional VND600-800 million.

"Small apartments are quite inconvenient, but I have no choice since housing prices keep rising," he says.

At the Linh Dam urban area in Hoang Mai District, 45-47 sq.m apartments in a low-priced project launched a decade ago have seen their prices surge by 35-40% since last year to VND36-40 million per square meter.

Data from property consultancy CBRE shows that in the second quarter of this year apartment prices rose by 25% year-on-year in the primary market and 22% in the secondary market.

Small units saw the biggest rises of 30-40% and even 50% in some places.

David Jackson, CEO of real estate agency Avison Young Vietnam, saying people perforce have to spend increasing amounts to own a home, points out they had numerous options at around VND2 billion two years ago, such as a one-bedroom unit in a new project or a two-bedroom unit on the secondary market.

That amount can only fetch a new studio or one-bedroom apartment far from the city center now, he adds.

According to experts, investment and speculation in small apartments is affecting people looking for a home to live in.

Units of this size typically account for 15-20% of a project and attract investors because of their lower prices, they say.

After seeing the surge in apartment prices earlier this year, many investors have bought multiple small units to both safeguard their money and rent them out while waiting for further price increases.

CBRE expects supply to soon improve in the city, with around 55,000 units in both high-rise and low-rise properties set to be launched by 2026, which it says will help stabilize prices.