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Apartment for sale price up in Hanoi

Released at: 15:20, 29/06/2016

Apartment for sale price up in Hanoi

Photo: Duc Anh

CBRE report notes some prices up 4-6% since last year.

by Hoang Thu

The apartments for sale market in Hanoi saw a slight increase in pricing in the second quarter, mostly in the high-end and mid-end segments.

Some projects increased prices by 4-6 per cent during the quarter compared to the end of last year, in particular those with good locations, within a relative short distance of the city center, and in the vicinity of infrastructure projects now under construction, according to CBRE’s quarterly report released on June 28.

In the high-end sector, prices went up in large-scale projects with well-known investors and providing sufficient facilities and amenities, according to Ms. Nguyen Hoai An, Director of CBRE Vietnam. “In the mid-end sector, projects with reasonable prices and good locations were in favor as there were great opportunities to increase the resale price to investors,” she added.

The price of real estate projects and infrastructure are closely related, with property values increasing or remaining idle depending on the development pace of new infrastructure, according to a report from the Vietnam National Real Estate Association (VNREA) released in June. “Many developers, therefore, tend to choose areas with well-developed infrastructure or in areas that can benefit from overall planning,” it wrote.

In the secondary market, the average secondary prices went up 1 per cent quarter-on-quarter but was down 1.3 per cent year-on-year.

By sector, the luxury sector increased 2.5 per cent year-on-year, high-end and mid-end decreased by 1.6 per cent and 1.3 per cent, respectively, while the low-end remained stable. Compared with the previous quarter the low-end sector saw a strong increase of 3.8 per cent, while other sectors fluctuated by 0.5 to 0.9 per cent, CBRE’s report noted.

There are still problems in the market, including the quality of projects as well as housing products as Vietnam’s real estate market is still young, with a history of just 20 years of development, Ms. An said in response to questions from VET.

“Compared with other markets like Singapore, Hong Kong and Thailand, housing prices in Vietnam are still much lower,” she said. In Bangkok, for example, high-end apartments are priced at around $8,000 per sq m but in Vietnam are around $2,000 per sq m.

“Problems around the quality of projects is part of the development cycle and could improve over time,” she added. Vietnam’s real estate market has become more mature nowadays compared to previous times and homebuyers are wiser and tend to seek developments belonging to reputable developers.

In the second quarter a total of 6,100 new units were launched from 17 projects, an increase of 19 per cent compared to the first quarter but falling 23 per cent year-on-year.

Notably, high-end apartments came back, with a project first launched at the beginning of 2015 and two newly-launched projects providing the market with about 700 units. Most of the total launch was taken up by mid-end apartments, supplying up to 82 per cent.

Moving forward, the market is expected to continue to remain positive in 2016, CBRE believes.

Sales activity will keep growing and newly-launched or re-launched projects will continue to contribute to the market.

Luxury and high-end projects are likely to attract costumers with real demand for accommodation, together with investors and foreigners, while mid-end and low-end projects tend to target end-users.

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