Greater Hanoi Ready-built Landed Property 2Q21
Market recovery faces the fourth COVID-19 wave headwind
Supply dropped under the impact of the pandemic
New official launches in the Greater Hanoi area reached 845 units, a drop of 27.1% q-o-q. Large-scale new urban areas in Hanoi such as Vinhomes Ocean Park, Hinode Royal Park and An Lac Green Symphony contributed up to 60.7% of the total new supply. However, under the impact of the fourth outbreak, the total supply of four selected satellite provinces remained minimal with only 151 units from small to medium-sized projects in Bac Ninh and Vinh Phuc provinces. Meanwhile, Hung Yen and Hai Phong recorded no new project launched in this quarter.
Reduced transactions in line with supply, but sentiment remained strong
The total take-up in Greater Hanoi reached 694 units, pushing the cumulative sale rate of the entire market to 98.7%. Sold units dropped 48.6% q-o-q due to a decrease in new supply, while the inventory was mostly large-sized units that were difficult to attract buyers.
The absorption rate of new launches remained high, reflecting strong market sentiment. In Hanoi, the rate was 67%, with 470 units sold out of 694 new units launched. Demand tended to concentrate in urban areas in Western Hanoi, such as Hoai Duc and Ha Dong, which have been well-invested with infrastructure and facilities. Meanwhile, the four selected satellite provinces recorded an absorption rate of 86%. Notably, despite being the centre of the recent outbreak, Bac Ninh still recorded the highest transaction volume of up to 130 units.
Primary prices witnessed a strong increase
In 2Q21, the average primary prices in Greater Hanoi were recorded around USD 4,941 per sqm land. The whole Northern area achieved significant price growth, with 28.2% y-o-y and 15.5% q-o-q. In Hanoi, the strongest growth was recorded in the Hoai Duc District (up to 42.8% y-o-y), mainly attributed to the new entrance of the well-invested An Lac Green Symphony project, thus having a higher selling price than the district average. Meanwhile, among the four satellite provinces, the highest price increase was recorded at about 25.3% y-o-y in the Ecopark project (Hung Yen Province), thanks to its sustainable development quality.
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Outlook: There will be an abundant supply of RBLs for the upcoming period
Hanoi market is expected to welcome about 2,000 – 2,500 units to be launched for the remainder of 2021, while the four satellite provinces will provide a total of about 1,000 – 1,500 units.
Given the good market sentiment, the primary price of RBL is expected to continue increasing until the end of 2021. However, these forecasts will highly depend on changing market sentiment in tandem with Covid-19 control.
- Greater Hanoi area consists of Hanoi, Hai Phong, Bac Ninhm Hung Yen and Vinh Phuc markets.
- Prices exclude VAT and sinking fund/maintenance fee. Price per sqm land = total unit value / size of the land plot on which the property is built.
- Official launch: Projects are considered as officially launched when the Sale Purchase Agreements are signed, typically upon infrastructure completion.
Source: JLL Research