That is the judgment of Ms. Do Thu Hang, Director of Savills Hanoi Research and Consultancy Department, at a press conference in Hanoi real estate market in the afternoon of October 16.
Price of primary apartment increased by 3% year on year.
Apartment price increase
According to Savills statistics, the apartment market in Hanoi in the third quarter had 11 new projects and 9 old projects continued to implement the next phase, providing the market with about 8,100 apartments, increasing 23% quarterly and 17% year on year.
Primary stock decreased by 5% QoQ but increased 8% YoY to 29,700 units. Grade B segment continues to lead the supply with 67% market share. In particular, Gia Lam and Long Bien lead the number of apartments for sale.
Price of primary apartments increased 1% QoQ and 3% YoY. Grade A apartments have the highest year-on-year price increase of 18%, largely due to the high selling prices of newly launched projects. However, sales were down 1% QoQ but increased 50% YoY.
The eastern area of Hanoi had the highest number of units sold in the quarter with 40% market share. Ha Dong, Tu Liem, Thanh Xuan and Hai Ba Trung are still the most sold areas.
Regarding the issue of apartment prices, Ms. Hang said that the price of Q3 in the whole market is increasing, mainly in Grade C apartments from past projects. Projects with the price of VND 18-20 million/m2 still have room to increase prices. The Grade A segment mainly increased in new projects.
According to Savills, the Hanoi market still has many motivations for housing development, with a golden population and positive economic prospects. Hanoi has witnessed a population growth rate of 2.2% over the past decade, with about 120,000 children being born and 80,000-100,000 immigrants each year.
In particular, Vietnam's super-rich are expected to increase at a rate of 10% per year in the period of 2018-2023, the fourth highest in the world.
According to the 2019 global competition report, Vietnam is the country with the highest increase in the world. Vietnam is forecast to continue to maintain an annual economic growth rate of 7% in 2020 with GDP per capita reaching 10,400 USD by 2030.
For the year-end market forecast, the representative of Savills said that in Q4, the Hanoi market will have about 15,800 apartments from 10 current and future projects to be launched for sale. Future supply will expand from inner districts to suburban districts. Gia Lam and Dong Anh districts will provide a total of 30% of future supply.
Notably, from 2020 onwards, foreign investors including Sumitomo, CapitaLand and Mitsubishi Corporation will start offering projects.
Small serviced apartment, flexible rental price to the throne
According to Savills report, Grade A segment and branded projects continue to lead the market. Rental rates for branded projects are 19% higher than for other projects.
In the third quarter, the supply reached 4,330 units, down 8% QoQ, as the market only added one new project but two projects closed. This led to an increase of 4% in average rent on a quarterly basis and occupancy of 84%.
Ms. Hoang Dieu Trang, Senior Manager of Savills Vietnam Commercial Leasing Department, said that the serviced apartment market in Hanoi is showing clear changes in the area of apartments and the lease term, in the direction of Small area and more flexible rental period.
Statistics of this unit shows that, in 1996, the proportion of studios and one bedroom accounted for only 16%, by the quarter 3-2019, this figure was 46%. In addition, tenants are not only foreign experts and senior traders with long-term rental needs, but also MICE guests/tourists with short-term accommodation needs. By partnering with online travel agencies, more than 90% of serviced apartment managers meet monthly and daily rental demand instead of annual contracts.
Meanwhile, considering the role of FDI inflows and the impacts on the serviced apartment segment, Ms. Hang said that with US $ 6.1 billion of FDI capital attracted in the first nine months of the year, Hanoi is now keeping an important position in the investment map and serviced apartment segment will benefit.
According to U.S. Best Coutries to Invest In 2009 rankings New and World Report, Vietnam has increased from 23 th to 8 th in terms of investment attraction. In particular, the number of tourists, experts and workers coming to Hanoi in particular, Vietnam in general under the nationality of FDI has also changed and shifted. Countries with large FDI inflows to Vietnam also bring more tourists, experts and labor.
“Serviced apartments are always a good and stable segment. In Q4-2019, with the addition of four major projects expected to enter the market, providing approximately 1,000 additional apartments, this market will become more active. In particular, three management brands of international stature are expected to continue to be present in the market, showing the attractiveness of the serviced apartment segment in Hanoi in the eyes of foreign investors”, Ms. Trang forecast.
According to Tam An