Hanoi townhouse, villa demand falls to 10-year low

By Ngoc Diem January 21, 2024 | 03:00 pm PT

Transactions in the Hanoi housing market’s townhouse and villa segments declined by 76% in 2023 to the lowest levels since 2014, according to property consultancy Savills.

There were only 359 transactions during the year, it said.

But their prices continued to rise, with the strongest increase seen in the primary market for villas, whose prices jumped 55% in the last quarter to VND160 million ($2,443) per square meter.

The average townhouse price increased by 3% to VND194 million.

In its 2023 market report, the Ministry of Construction said prices of villas and townhouses in Hanoi remained high despite low transaction numbers.

The average price exceeded VND100 million per square meter, rising to VND300 million in some places in the west.

Do Thu Hang, senior director of research and consulting at Savills Hanoi, said the limited supply and high prices were to blame for the lack of transactions.

The primary market in the two segments added only 700 units, a 23% decline from the previous year, according to Savills.

Analysts said high construction costs and land use fees meant most developers maintained or even increased their prices.

Hang said developers were cautious, prioritizing completion of legal procedures and construction over sales promotion, and so introductory prices at new projects were steep.

As a result, the few projects with reasonable prices, like those in Me Linh District, far from the city center, quickly sold out.

Higher primary market prices also caused buyers to look at the secondary market, she said.

The secondary market is usually more diverse and affordable, and properties come with proper documentation.

According to a Savills expert, in the secondary market, villas cost 7% less than in the primary market while townhouses are 24% cheaper.

By 2026 the two segments will see 14,000 new units at 37 projects, 30% of them in Dong Anh District, according to Savills.

They include 2,900 new units to be launched this year.

Some large upcoming projects include Vinhomes Co Loa in Dong Anh District and Vinhomes Wonder Park in Dan Phuong District.

Hang said infrastructure development, especially the construction of Ring Road Nos.3.5 and 4, would expand the city housing market, with 75% of new supply in 2024-26 to be on the outskirts.