Hanoi old apartment market cools down

Van and her husband first wanted to sell their two-bedroom unit in Hoang Mai District’s Linh Dam urban area in early March when the market was booming.

But believing that prices will continue to rise, the couple decided to wait for their five-year-old apartment to appreciate further.

They finally listed it in early April for VND3.05 billion (US$119,800), nearly double their purchase price of VND1.6 billion.

Van asked several brokers to advertise her property and received nearly 20 calls from interested people in just the first week.

Many of them negotiated with her, trying to lower the price, but she refused, confident that old apartments were scarce and in high demand.

Then interest in her apartment waned, and her brokers suggested reducing the asking price by VND200-300 million to attract buyers.

Van relented and lowered the price to VND2.95 billion last week, but she has only seen three potential buyers since and no takers.

She said: "My husband regrets not selling a month earlier when old apartments were quickly selling out. Who could have thought the market would change so fast?"

Trung Duc of Ha Dong District listed his 74-square-apartment on To Huu Street for VND3.3 billion, nearly twice its purchase price, three weeks ago.

The price was low given the limited apartment supply and that an identical unit on the same floor sold for VND3.4 billion two months earlier.

He has hired three brokers, but has been unable to sell it.

Le Vuong, a broker in Nam Tu Liem District, said the demand for old apartments has been declining over the last month.

He used to take a dozen people a week on apartment tours in early March, and most would seal the deal after just one or two visits for fear that prices would rise further.

But since mid-April most units he has been trying to sell have received very little attention.

"A few people make inquiries, but most lose interest as soon as they hear the prices," he said.

Many owners who urgently need to sell their property offer free furniture and discounts of VND100 million, but these incentives have proved to be of little effect.

Transactions in the secondary market for apartments have halved from two months ago, according to the director of a real estate trading floor in Hoang Mai District.

Data from real estate trading platform Batdongsan shows that since mid-April interest in apartments has decreased by 40-50% from the high levels seen in March.

Pham Duc Toan, CEO of property firm EZ Property, said the short-lived surge in transactions and prices in the Hanoi apartment market was due to prices being inflated.

Apartment prices are susceptible to being inflated by speculators due to their low supply in recent years, he said.

Now that more buyers have become aware of the bubble and overcome their "fear of missing out," the segment is gradually becoming inactive, he noted.

Concurring with this, Do Thu Hang, senior director of research and consulting at Savills Hanoi, said prices might cool down since the market might see more supply this year.

Around 12,300 new apartments will be added this year in Nam Tu Liem, Ha Dong and Dong Anh districts, according to Savills.

There will also be 203,000 new apartments in neighboring provinces such as Hung Yen and Bac Ninh in the next two years.