The housing market in Hanoi has shown some signs of improvement in the first half of 2024. However, it still faces issues of limited supply and imbalance. The apartment segment has been especially tight in terms of new supply.

According to a recent report by Savills Vietnam, the average price of apartments in the secondary market has increased by 25% compared to the same period last year, with some B and C class segments seeing rises of 27-29%. From 2020 until now, primary market prices have increased by an average of 18% per year while secondary prices have risen 14% annually.

As of mid-2024, primary market apartment prices in Hanoi reached 65 million VND per square meter, an increase of 10% quarterly and 24% yearly. Notably, Savills observed no new supply under 45 million VND in Q2/2024. Limited new supply has been a key factor pushing up apartment prices significantly over the past few years.

In Q2/2024, new supply fell 34% quarterly and 25% yearly, totaling just 2,697 units. Ready supply reached 10,317 units, dropping 20% quarterly and 49% yearly. The majority of transactions were B-class apartments, accounting for 96% of the total 5,085 units sold.

In contrast, the villa and shophouse segment has yet to show strong signs of recovery. Transaction volumes fell 40% quarterly for this segment in the first half of 2024, though rose 5% yearly, totaling just 111 units. Quarterly absorption rate was only 18%. New supply absorption reached 48%, down 15 percentage points quarterly and 3 points yearly.

Most primary market transactions were recorded in Ha Dong district, making up 61% due to upcoming infrastructure projects. Quarters Hoang Mai and Thuong Tin followed with 14% and 9% respectively. Prices of primary market villas in ongoing projects increased 9% to reach 178 million VND/sqm of land. Shophouse prices rose 3% quarterly to 288 million VND/sqm.

It is expected that Hanoi's housing market will enter a "new cycle" following the new Land Law and Real Estate Business Law coming into effect from August 1st. This should help address long-standing issues like limited supply over time. Demand is also likely to increasingly shift to outer suburban areas due to land scarcity in the city center.