Hanoi: The apartment market is still directed to the segment to buy to stay

Market observers said that in the second quarter of 2019, the mid-end segment in Hanoi market continued to lead the market, accounting for about 70-80% of the total new supply and launch. The market is targeting customers who buy houses to stay.

On the morning of July 9, CBRE Vietnam held a press conference to announce the market focus for the second quarter of 2019. Accordingly, by the end of the second quarter of 2019, the Hanoi market had many new supply sources, the price increased slightly, sales were also more positive than the first quarter.

Specifically, in the first 6 months, the Hanoi market recorded 17,700 new launches - one of the first half of the year with the latest supply. The mid-end and affordable segments dominated the market, accounting for approximately 98% of total new launches in the second quarter. The high-end segment had only two new launches in the West Lake area.

“The mid-end segment continues to lead the market, accounting for approximately 70-80% of total new supply and sales. This shows that the Hanoi market is still targeting the segment of buyers to stay" this unit said.

However, recent urban products have also attracted a segment of domestic investors.

Sales are quite positive with over 40% of new supply and sale. In the quarter, there were a total of 6,900 units sold, up 17% year on year. Positive sales performance and positive construction progress from both urban and individual housing projects have contributed to positive sales.

The mid-end segment dominates the Hanoi apartment market.

Regarding the selling price, the average in the second quarter recorded at 1,337 USD (about 31 million)/m2, up 4% year on year. If comparing the same basket of projects by year, the primary price increased only slightly by 1%. Notably, the high-end segment recorded an average price of USD 2,345 (about VND 54 million)/m2 - the highest price in this segment in the past five years.

CBRE forecasts that the new supply in 2019 is expected to be about 3,000 units - the same level as the period 2016-2018. While inner-city districts are becoming more crowded, housing supply is expected to gradually move away from the existing 10-kilometer radius from the existing central area. Urban projects will focus on the main supply to bring synchronized utilities and diverse products. With growing infrastructure and recent collaborations between large corporations, these projects are expected to attract market attention in the coming years.

General assessment of the market, Mr. Nguyen Trong Thuc, Senior Manager, Consulting and Research Service of CBRE, said that in order to increase purchase transactions over the past time, businesses have launched many opening sale programs and promotion. Moreover, unlike the previous period, focusing only on housing but ignoring utilities, many developers now attach importance to building utilities in advance to attract customers. 

Along with that, the Government is increasingly investing in infrastructure, better connected traffic is the basis for expanding the four-sided housing market in Hanoi, especially the East and the West.

According to Thuc, along with the mid-end and affordable segment, part of the supply in the second half of 2019 will come from the high-end and luxury segments.

"In the context that the Government is limiting credit to real estate, investors are trying to diversify products, expand FDI attraction to attract customers" Thuc said.

Before concerns of public opinion about the crisis cycle of the real estate market, Mr. Nguyen Vinh Tran, President and CEO of MIK Group, analyzed in the past five years, the supply and demand of real estate products. The real estate market has been well controlled and the selling price of real estate has not increased rapidly.

If there are 1,000 apartments, the investor will not open all sales but will in stages to adjust and balance the market. In addition, investors are now interested in the trend of young people buying houses such as area, utilities, comfort and intelligence to adjust products accordingly.

“When we control the supply and demand, we control the price, not leading to the bubble factor. I think this is the perfect time for us to invest in apartments even in the luxury segment because the price is still lower than other countries in the region” Mr. Tran said.

Also according to MIK Group leaders, 2019 is a new but continuing cycle of the previous market. Currently, the market has not detected any indicators showing the end of the growth cycle.

At the moment, many people worry that the high-end real estate segment will be redundant, but the Vietnamese government's policy for foreigners to buy houses will create conditions for them to buy luxury real estate. "This further confirms that the luxury real estate segment still has development potential" Mr. Tran said.

According to Tam An