Hanoi Apartment for Sale Market 3Q21
New supply continues to be low due to the pandemic
Covid-19 continued to develop complexities, resulting in strict social distancing measures in Hanoi. The situation interrupted construction activities, causing difficulties to new residential projects, hurdles to investment procedures and delays to new sale events. The current market-exploration sentiment of the developer is also the reason for the continued low supply of apartments in 3Q21. The new official supply totalling 1,018 units in 3Q21 is down by half compared to the 2Q21 level. Most of the new supply is in the Nam Tu Liem District. Only two projects launched – The Matrix One and Masteri Smart City, with 370 and 300 units, accounted for 36.3% and 29.4% of the total new launches.
Sales decreased with restricted direct transactions
Total sales in 3Q21 reached 1,449 units, fell 46.8% q-o-q. The main reason for the drop in the new take-up was the disruption of direct off-line transactions. Some property developers actively adapted to situation, converting from the traditional approach to online communication with homebuyers. Nonetheless, since the apartment is a special product with high value and involves several legal procedures, the buyers are still concerned as they are unable to directly survey and get first-hand information about the project.
Price continues to be stable
The average primary price was at USD 1,650 per sqm in 3Q21, increased by 9.3% y-o-y mainly due to the addition of high-quality projects to the primary basket and low-priced projects sold out. The market recorded a stable price on project-base, slight increase at 1.4% y-o-y and 0.9% q-o-q. Developers have been improving sales policies by offering incentives to homebuyers, such as zero or low-interest rates, discounts for customers signing sale contracts/deposit contracts during Covid-19, free management fees and utility usage costs, especially in the Luxury and Premium segments.
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Outlook: The market is expected to recover, but recovery can’t be rapid
In 4Q21, the Hanoi apartment market is expected to recover as the social distancing measure are gradually removed. However, some new projects might postpone the launching date to 2022 when the market sentiment is improved instead of 4Q21 as planned. In 4Q21, the market is forecasted to welcome approximately 2,651 new units, bringing the total new supply in 2021 to 11,448 units, reduced by 25.3% compared to 2020. Both owner-occupied and investment demand will gradually recover, but with a higher degree of caution. Besides, the market's recovery will most certainly be gradual rather than quick, as many real estate sales agencies have been seriously impacted and weakened due to significant staff layoffs.
- Prices exclude VAT and sinking fund/maintenance fee.
- Official launch: Projects are considered as officially launched when the Sale Purchase Agreements are signed, typically upon foundation completion.
Source: JLL Research