The real estate market in Vietnam continues to show steady growth, with the number of apartment transactions increasing in the third quarter of 2022, reaching 3605 apartments – a 61% QoQ and 49% YoY increase, according to Savills‘ Quarter 3 real estate report. Grade B apartments accounted for 64% of the market share, with an absorption rate of newly launched projects reaching 33%. The average primary selling price was 47 million/m2, up 5% QoQ and 11% YoY. Despite 15 consecutive quarters of price increases, primary prices are now 53% higher than in Q1 2019, which can be attributed to the continued limited supply and improvement in the quality of projects. The price of construction materials has also contributed to the increase in apartment prices.
The majority of apartments available in the market range from 2 to 4 billion dong, which accounted for 85% of the supply, sharply increasing from 15% in 2018. Apartments priced under 2 billion dong accounted for 12%, while the rest were apartments priced at over 4 billion VND. The rental yield for apartments is 6%/year.
In the fourth quarter of 2022, the market will see 8 new projects and the next phase of 2 projects open for sale, providing 5033 apartments. Approximately 70% of the future supply will be Grade B apartments located in Nam Tu Liem, Thanh Xuan, and Gia Lam districts.
Overall, the real estate market in Vietnam remains strong, with continued growth in the apartment sector driven by increasing demand and limited supply. As the market continues to mature, it is important for investors to carefully consider their options and work with reputable partners to ensure a profitable investment.
According to Savills’ Quarter 3 real estate report, the absorption rate in the villas and townhouses market decreased by 5% QoQ to 25%, which is attributed to credit tightening. Nevertheless, the new supply in Q3 was well absorbed, accounting for 75% of the market’s transactions. In existing projects, the primary price of villas increased by 10% QoQ and adjacent houses increased by 22% QoQ due to the low inventory at these projects. Despite the lower absorption rate, the market still shows signs of growth and demand for villas and townhouses remains strong.
In both the condominium and villas/townhouses markets, competition is growing from projects located outside the city center and in neighboring provinces like Hung Yen and Bac Ninh. During the third quarter of 2022, Vinhomes Ocean Park and Vinhomes Smart City accounted for 66% of new supply and 55% of sold units for the entire condominium market, indicating strong demand for off-center projects. Investors both domestic and foreign are actively seeking land for housing in neighboring provinces, where the supply of housing is increasing and meeting the demand in Hanoi. Hung Yen and Bac Ninh are expected to provide around 104,800 apartments. For the villas and townhouses market, projects located outside the city center, particularly in the east of Hanoi, will benefit from the completion of infrastructure projects such as the extended ring road, Vinh Tuy 2 bridge, planning belt 4, and Tran Hung Dao bridge. These projects will significantly reduce travel times from Hanoi to other localities, increasing the attractiveness of neighboring projects such as those in Hung Yen. Meanwhile, Hanoi’s future supply in Q4 is projected to be lower, with only 955 units expected from 7 projects. Projects with unattractive locations and prices will face significant challenges in achieving good absorption, particularly when competing with other projects in neighboring provinces with increasingly developed transport infrastructure.
Download Real Estate Report of Q3 2022 issued by CBRE
