Rising Prices in Hanoi’s Market Driven by Infrastructure Upgrades and Major Near-Completion Real Estate Projects
Hanoi’s real estate market is heating up, propelled by a confluence of infrastructure upgrades and significant real estate projects nearing completion. These advancements aren’t just improving the city’s layout but also reshaping property values. As we approach the end of 2024, a perfect storm of regulations and economic factors has set the stage for a notable surge in the market.
New Drivers of Market Growth
A crucial driver of this transformation is the supportive regulatory environment crafted by the Vietnamese government. The introduction of comprehensive laws—the Housing Law 2023, the Real Estate Business Law 2023, and the Land Law 2024—has laid a solid foundation for real estate development. Developers are now more confident in ramping up their projects, indicating strong momentum for the market throughout the year.
Price Trends in 2024
The price dynamics in Hanoi’s real estate sector are certainly noteworthy. According to OneHousing’s Market Research and Customer Insights Center, primary apartment prices have soared to around $2,940 per square meter as of Q3 2024. This spike, however, is just seen as the tip of the iceberg. Experts are forecasting a new growth cycle, especially with the introduction of “ultra-luxury” apartment projects anticipated to transform the market further.
Tran Quang Trung, Business Development Director at OneHousing, notes, “Apartment prices in Hanoi have risen quickly, causing a temporary ‘price shock,’ but this is just the start of a new growth cycle that is expected to last until 2030.” The implications of this are significant, signaling attractive opportunities for homebuyers and investors alike.
Rise in Supply and Demand Dynamics
The forecast for 2024 is equally optimistic, with a projected introduction of more than 10,000 new apartment units. This will bring the total number of new apartments launched to nearly 30,000 for the year. As supply ramps up, experts suggest that both primary and secondary prices are likely to continue their upward trend, reflecting a booming market.
Furthermore, land prices on Hanoi’s outskirts are gaining traction, with districts such as Dan Phuong, Hoai Duc, Me Linh, and Dong Anh seeing price increases of 20–30% since early 2024. Prices for some land plots have surged to between $4,900 and $6,530 per square meter, driven by ongoing infrastructure upgrades and pivotal real estate developments.
Infrastructure Investments Fueling Demand
Nguyen Quoc Anh, Deputy General Director of batdongsan.com.vn, reinforces this trend, stating, “Land plots remain a prime investment focus in times of a vibrant real estate market.” While this segment faced challenges in the preceding years, 2024 marks a turnaround, spurred by a resurgence of interest in land auctions around Hanoi.
Additionally, specific pricing data for villa and townhouse projects, provided by the Ministry of Construction, reveals a steady increase in prices compared to previous quarters. Projects launched in well-developed areas are seeing relatively elevated asking prices, particularly in districts like Dong Anh and Long Bien, where prices rose by approximately 5%, influenced by investment in infrastructure and the nearing completion of various projects.
A Multifaceted Market Outlook
Beyond residential segments, other categories of real estate—such as industrial and commercial properties—are not being left behind. With a notable influx of foreign direct investment (FDI) and Vietnam’s strategic economic positioning in global supply chains, demand for warehouses and industrial spaces continues to thrive.
The Dat Xanh Real Estate Research Institute reports an impressive occupancy rate in industrial zones—reaching 83% in northern areas and 92% in the south. Increasing mergers and acquisitions (M&A) activities signal a shift in investor focus, aiming more towards industrial rather than residential real estate, with several high-value projects currently being executed.
Long-Term Growth for Retail and Hospitality
In terms of commercial real estate, sectors such as retail and hospitality are also expected to grow in both scale and quality. The influx of FDI has yielded benefits, with new shopping malls that include various integrated activities attracting consumer footfall. Troy Griffiths, Deputy Managing Director of Savills Vietnam, highlights the robust demand for office spaces from expanding companies as a key growth indicator.
Pham Thi Mien from the Vietnam Association of Realtors (VARS) echoes this sentiment, pointing out that high-end apartments and legally approved land plots will likely attract investor interest as the market recovers. She notes the vibrancy returning to villas and townhouses while also acknowledging the steady growth in industrial real estate and tourism properties, particularly with the introduction of ownership certificates for condotels.
Government Support for Social Housing
The government is also taking significant steps to foster social housing projects, further supporting the growth trajectory of the real estate market in Hanoi. These initiatives aim to enhance housing accessibility, especially for low- and middle-income families, creating a balanced ecosystem within the market.
The signals coming from Hanoi’s real estate sector are undeniably positive, characterized by rising prices, heightened demand, and promising support from government initiatives. As the city continues to develop and modernize, both investors and homebuyers should keep a keen eye on the evolving landscape—a landscape ripe with opportunity and potential.