Vietnam’s Economic and Real Estate Surge in 2024

Vietnam’s economy has showcased remarkable resilience and growth throughout 2024. With a GDP growth rate of 7.09%, the country is reaping the benefits of recovery from previous challenges. Different sectors contributed significantly to this upward trend: agriculture, forestry, and fisheries expanded by 3.27%, while industry and construction surged by 8.24%. The services sector, a crucial part of the economy, recorded a robust growth of 7.38%. Notably, international trade played a vital role, with exports of goods and services climbing by 11.35% and imports rising by 13.49%, signaling a strong rebound in Vietnam’s trade relationships. Inflation remained under control, final consumption grew by 7.54%, and foreign investment influx reached $6.31 billion, further cementing Vietnam’s status as a promising economic landscape.

Rapid Growth in Hanoi’s Apartment Supply

In 2024, Hanoi saw a substantial surge in its real estate market, particularly in the segment of new apartments. Approximately 28,700 units were introduced, a staggering 3.4 times increase compared to 2023, making it the highest launch rate in the past five years. The fourth quarter alone recorded the introduction of 9,138 new apartments, marking a 5% increase quarterly and a 146% increase year-on-year. This rapid growth can largely be attributed to new projects in integrated urban developments like Vinhomes Ocean Park and Vinhomes Global Gate.

Suburban areas drove this supply surge, surpassing the Western districts and contributing to 75% of the overall market growth. The mid-end segment dominated with 57% of the new launches, while the high-end segment accounted for the remaining 43%. Despite a minor quarterly decline of 6% in sales, annual new apartment sales climbed to nearly 29,800 units, a remarkable 1.8 times rise year-on-year. Strong housing demand continues to be fueled by urban migration and population growth, with most new projects enjoying an impressive absorption rate of around 90%.

Landed Property Market Achievements

Hanoi’s landed property market experienced a historic peak in Q4 2024, with nearly 3,900 new properties launched. Although there was a quarterly decrease of 36% in new units, this reflects a remarkable 12.5 times growth year-on-year. The Dong Anh District played a pivotal role, contributing 85% of new supply through a significant integrated urban project. The suburban area continued to dominate, accounting for 98% of the total new supply. The year recorded over 3,000 landed property sales, up nearly 11.7 times compared to 2023.

However, Q4 2024 did see a drop of 52% in quarter-on-quarter sales, although it still reflected a tenfold increase year-on-year. Rising prices characterized the market, with landed property values increasing to approximately USD 11,934 per sqm—up 101% year-on-year. Developer strategies shifted, temporarily halting sales activities in anticipation of market improvements, reflecting a dynamic and rapidly evolving real estate landscape.

Retail Market Dynamics in Hanoi

In the realm of retail, Hanoi’s market maintained its robust stature, with no new supply introduced in Q4 2024. The total retail area remained at nearly 1.4 million sqm, bolstered by a substantial 14,734 sqm of retail space added throughout the year. New projects like The Linc and Diamond Park Plaza emerged in non-central areas, expanding the market’s reach.

The occupancy rate in Q4 2024 climbed slightly to 85.7%, yet it remained marginally lower than the previous year. Retail sectors such as Cosmetics, F&B, and Supermarkets experienced growth, with major brands expanding their footprint. Rental rates for ground floor spaces reached USD 44.6 per sqm per month, reflecting a steady climb fueled by stable occupancy rates.

Looking ahead, approximately 17 new retail projects focusing on western areas are set to add around 278,000 sqm to the market by 2027, showcasing the continuous development potential within Hanoi’s retail sector.

Stability in the Office Market

The office market in Hanoi exhibited stability in Q4 2024, with no substantial changes in supply for Grade A and Grade B offices. Yearly, the supply of Grade A offices increased by a moderate 2.55%, while Grade B supply grew more markedly at 2.79%, signaling developer confidence in urban office spaces.

In terms of occupancy, Grade A offices enjoyed a slight boost of 1.34 percentage points quarter-on-quarter and a significant increase of 5.07 percentage points year-on-year, largely driven by demand in IT, Banking, and Logistics sectors. Conversely, the occupancy rate for Grade B offices dipped slightly, revealing a preference for high-quality spaces among tenants amid rising competition.

Rents for both office categories saw slight declines in Q4 2024. Anticipations for 2025 project a modest increase in rents, aligning with gradual improvements in leasing demand, and a continued focus on tenants’ preferences for sustainable and adaptable workspaces.

Industrial Expansion in the Northern Key Economic Region

New industrial developments are gaining momentum in the Northern Key Economic Region, highlighted by the launch of the expanded Yen My II Industrial Park in Hung Yen, which added 150 hectares for lease. The total supply of industrial land in the North surpassed 16,800 hectares, reflecting an increase of 0.9% quarter-on-quarter and 15.2% year-on-year. Additionally, fresh projects in ready-built factories added to the competitive landscape, increasing the total market supply significantly.

The region saw a robust net absorption of 83 hectares, with key demand rising from sectors such as Electronics and Chemicals. Industrial land’s average asking rent reached USD 130 per sqm per lease term, reflecting a 4.8% annual increase.

Expectations for the next three years highlight a projected addition of 4,000 hectares in industrial land. However, delays due to land clearance issues may affect planned launches. Noteworthy developments in the pipeline will include significant additions to both factory and warehouse spaces.

This snapshot of Vietnam’s thriving economic and real estate landscape in 2024 encapsulates a period of growth, adaptation, and recovery, showcasing a nation poised for even greater advancements in the coming years.