Why prices in Hanoi increased faster than Ho Chi Minh City?

According to experts, in the past few years, Hanoi’s periphery has continuously appeared “land fever”, thereby pushing up the general price of other segments such as apartments, plus combined with other psychological factors the growth rate of apartment prices in Hanoi is higher than in Ho Chi Minh City.

Hanoi vs Ho Chi Minh City
Hanoi vs HCMC

According to CBRE, in addition to the positive signals of the post-pandemic market, real estate is still facing many immediate difficulties including licensing issues, changes in legal regulations and tightening policies, credit, rising costs and the imbalance between supply and demand. These challenges will force both, investors and buyers, to closely monitor economic movements and plan their own optimal solutions.

Notably, after the pandemic, the residential real estate market witnessed a change in the mindset of investors. Green and health-friendly elements will be added to the project to meet the needs of buyers to improve the quality of life. The city’s neighborhoods are forecast to continue to thrive due to improved connectivity infrastructure and high prices in HCMC.

Meanwhile, according to the latest report of Batdongsan.com, as of the second quarter of 2022, the selling price of affordable apartments in Hanoi (under 30 million VND/m2) is at 29 million VND/m2, up 12% compared to the average for the whole year of 2021. The selling price of mid-end apartments (30 – 50 million VND/m2) is 41 million VND/m2, an increase of 7%. The selling price of a luxury apartment (>50 million VND/m2) is 90 million VND/m2, up 14%.

In Ho Chi Minh City, the selling price of affordable apartments (under 35 million VND/m2) is 35 million VND/m2, an increase of 4%. For mid-end apartments (35-55 million VND/m2, the average asking price is 55 million VND/m2, an increase of 4%, the asking price of high-class apartments (> 55 million VND/m2) increased has by 7% to 106 million VND/m2.

According to experts, the indicators just mentioned show that the price growth rate in the apartment segments of Hanoi is higher than in Ho Chi Minh City.

Explaining the situation that the price of apartments in Hanoi increased faster than apartments in Ho Chi Minh City, Mr. Dinh Minh Tuan, director of Batdongsan in the South once said that, in the context of limited supply, the price of construction materials increased. Demand is increasing day by day, the price adjustment is understand.

Previously, apartment prices in Ho Chi Minh City were significant higher than in Hanoi. But up to now, with almost the same adjustment price but taking place on two different price bases, the percentage change will inevitably be different.

At the same time, in the past few years, the area around Hanoi has continuously appeared a “land fever”, thereby pushing up the general price of other segments such as apartments.

In addition, part of the reason is due to the different psychology of buying a house in Ho Chi Minh City and Hanoi. specifically, buyers in Hanoi are more cautious and safer, when sensing possible fluctuations in the market such as rising raw material prices, inflation, etc., they tend to rush to buy houses. , causing demand to increase and, as a rule, house prices also increase. However, homebuyers in Ho Chi Minh City are less interested in these factors.

Housing is still a sustainable investment channel

CBRE’s report shows that, after a quiet quarter with less than 900 new units for sale, in the second quarter of 2022, the real estate market witnessed a spike in new supply. The new supply exploded with 15,528 units from 12 new launch projects, surpassing the total new supply for the whole year of 2021. In which, the East area, especially Thu Duc City (HCMC), contributed 88. % new supply.

CBRE said that, after the pandemic, housing is still considered a sustainable investment channel for medium and long-term investors in Ho Chi Minh City.

In particular, supported by the upgrade of project locations in suburban districts, the high-end segment continued to dominate the market, accounting for 93% of new supply in the second quarter of 2022.

The mid-end segment has only one new sale, while the affordable segment has almost lost its new supply since the first quarter of 2019.

Notably, the mid-end apartment segment that meets the needs of buyers to live in is the most popular product in Ho Chi Minh City with a market share of up to 41% of the total accumulated supply of the whole market.

According to CBRE, the price upgrade of projects in the periphery does not only contribute to changing the product segment structure in new supply but also promotes primary price growth.

Specifically, the average primary price of the whole market reached $2,455/m2, up 2.7% QoQ and 8.6% YoY. The mid-end segment benefited the most from price increases in the non-CBD area with price increases of 1.9% QoQ and 7.0% YoY while prices of the luxury and high-end segments fell from zero .6 to 3.8% compared to Q2/2021.

Thanks to the skyrocketing new supply, the number of sold units increased accordingly. the market, the market recorded a total of 11,259 units successfully offered for sale, an increase of nearly 1.4 times over the same period last year. However, the absorption rate of new projects is almost unchanged year-on-year, averaging at 72%.

Leave a Comment

Your email address will not be published. Required fields are marked *