New apartments in Hanoi sell out despite rising prices

By Thuy Linh, Ngoc Diem   April 23, 2024 | 03:36 pm PT
New apartments in Hanoi sell out despite rising prices
A premium apartment project soon to be handed over in the western part of Hanoi. Photo by VnExpress/Ngoc Diem
Most apartment projects launched in Hanoi last quarter are fully sold despite being high-priced at more than VND60 million (US$2,360) per square meter.

Earlier this month Minh Ngoc of Ha Dong District went to see a new project in the western part of the city that was scheduled for handover by the last quarter of 2025 in the hope of finding her dream home.

But hope quickly turned to disappointment: Most units had been sold though the sale had only been announced recently.

There were nearly 600 apartments, all priced at over VND60 million per square meter, but had been snapped up within a few weeks.

Seeing Ngoc’s frustration, her real estate agent informed her about another project right next door.

This one has not been put on sale by the developer yet, but its apartments are expected to be priced at around VND68 million and handed over by late 2025 at the earliest.

The agent advised her to place a VND50-100 million deposit to get into the "priority booking list" when the project is officially launched.

Ngoc says: "The agent said there is no guaranteed I will get my desired apartment even with the deposit since some units in good locations are much sought after. But they will repay my deposit if I cannot buy the unit that I want."

This made her even more anxious as her family of four was still living in a rented house even as the prices of both old and new apartments were rising by the week.

In the first three months of 2024 around 2,300 new apartments entered the market, mostly in the premium segment with prices of VND60-120 million per square meter, according to property consultancy CBRE.

Nearly 2,000 have been sold, an absorption rate of nearly 87%, it says.

The firm cited a project in Tay Mo Ward, Nam Tu Liem District, as an example of the high demand for new apartments in Hanoi.

The project has around 2,200 units that have yet to be officially listed for sale.

The minimum price is expected to be VND66 million per square meter, but over 4,000 reservations have been made to buy so far, CBRE says.

At another new project nearby, 80% of its 700 units costing above VND56 million per square meter were sold in the first quarter, it adds.

According to real estate firm Dat Xanh Services, there was a 15% year-on-year increase in absorption rate in the Hanoi apartment market despite prices of high-end apartments (VND60-100 million per square meter) rising by 5-10% and those of mid-priced apartments (VND45-60 million) by 15-20% from a year earlier.

Danh Ngoc, head of the brokerage department at a large city-based real estate firm, says inventory from previous years is also garnering much interest now.

When the apartment market was inactive last year, his company had to introduce several incentive schemes, one of which allowed buyers to return their apartment within 18 months if they did not like it.

Over 100 three- and four-bedroom apartments in a residential area in Thanh Tri District were returned.

These units were all sold within a month after the Tet (Lunar New Year) holidays, which ended on Feb. 14, Ngoc says.

"Since mid-February more customers have been looking to buy apartments to flip or rent out because bank deposit interest rates have decreased."

Similarly, old inventories at some apartment projects in Hoai Duc District were also sold out, he adds.

As demand catches up with supply, developers are no longer offering many promotions or huge discounts as they did in the first half of last year.

A recent survey found that while policies such as zero interest until handover, early payment discounts and complimentary furniture packages continued in the first quarter, they were much less generous.

The discounts were 3-10% as against 20% in early 2023.

Higher costs also caused developers to cut down on discounts and promotions in the first quarter, Dat Xanh Services explains.

Experts think that with legal hurdles set to be removed in 2025, apartment supply in Hanoi and surrounding areas might see a major jump with 101 projects pumping out 84,400 units in the next few years.

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