Greater Hanoi[1] Ready-built Landed Property (RBL) 4Q21

Primary prices continued to record a strong increase

January 05, 2022
Hanoi being ahead of the new supply

The tensions of the pandemic with the large inventory volume and permission issues made negative impacts on launching plans and construction progress in primary projects. Thus, the Northern RBL market recorded a decrease of new supply in 4Q21 with only 453 units. Particularly, 86% of new supply mainly came from projects in Hanoi, especially in the West with more and more infrastructure completion. In contrast to Hanoi, the greater Hanoi provinces witnessed a quiet quarter owing to restricted supply, with only 62 units launched in Hai Phong province.

Rising transaction volume at the end of this year

Information about the Red River subdivision planning, turning suburban districts into becoming urban districts and concerned psychology related to inflation rate led to high demand in 4Q21, with 1,110 units taken, up by 77.6% q-o-q. Projects in the West of Hanoi continued witnessing the specific heat when units sold were mostly in Hoai Duc and Ha Dong districts, with 50% of total units taken in this quarter. Advantages of synchronised infrastructure in the West and high accessibility to the inner city and other neighbouring provinces were the main reasons for Hoai Duc and Ha Dong districts to be on top. In tandem with the high demand in Hoai Duc and Ha Dong, products in these projects mostly had well-organised planning, focused on the quality of residents, which made good attractions to investors and home buyers. Meanwhile, the demand in this quarter was mainly contributed by Bac Ninh and Hai Phong provinces due to good FDI absorption ability, high supply as per the demand and affordable selling price.

Primary prices continued to record a strong increase

The average primary price reached USD 4,674 per sqm[1], up by 8.4% q-o-q and 11.6% y-o-y in Hanoi and the greater Hanoi provinces. The average primary price in suburbs of Hanoi had a strong rise, especially in Hoai Duc, with an average increase of 12.6% q-o-q due to the impacts of suburban prices at the end of this year and well-organised planning & prime location projects for investment potential in the future. Besides, projects in Hoang Mai district also recorded a significant increase of 12% to 13% q-o-q.

Outlook: Supply subject to uncertainty in 4Q21 but will improve in 2022

Future supply depends a lot on the Covid-19 control in the North. JLL estimates that in 2022, Hanoi will welcome the launch of 3,700-4,200 units, primarily by well-organised integrated projects that have clear legal status in the suburbs. In the meantime, the estimation in surrounding provinces will achieve 3,400 units. In addition, public investment policies, as well as infrastructure development projects such as Ring Road 4, Metro Line 2A & 3, the Red River subdivision planning, are forecasted to help the average primary price keep rising.

[1] Greater Hanoi area consists of Hanoi, Hai Phong, Bac Ninhm Hung Yen and Vinh Phuc markets.
[2] 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.
[3] Official launch: Projects are considered as officially launched when the Sale Purchase Agreements are signed, typically upon infrastructure completion.
Source: JLL Research

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