Housing Prices Rise in Select Vietnamese Cities Despite Increased Supply
Hanoi Experiences Significant Price Growth, While HCMC Sees Mixed Trends
Housing prices in several Vietnamese provinces and cities have continued to climb in the third quarter of 2024, despite an increase in housing supply. The Ministry of Construction reported that nationwide, 16 commercial housing projects with 3,314 units were completed, 23 new projects with 11,669 units received construction permits, and 55 projects with 21,374 off-the-plan units were approved. Additionally, nearly 38,400 condos and detached houses were transacted, alongside around 103,000 land plot deals. However, price fluctuations remain, particularly in Hanoi City, where condo prices surged by 4% to 6% quarter-on-quarter and 22% to 25% year-on-year in both new and existing developments. Villa and townhouse prices in Hanoi's secondary markets averaged around VND160 million per square meter in sought-after areas.
In contrast, Ho Chi Minh City (HCMC) saw more stable villa and townhouse prices in prime projects, although certain upscale segments experienced significant declines, with prices dropping by up to 14% quarter-on-quarter and 28% year-on-year for larger properties. Homes priced below VND10 billion enjoyed relatively high transaction volumes during the quarter. The Ministry attributed Hanoi's price increases to rising land costs and recent adjustments in land valuation methods, including land-use auctions that have driven prices higher. Additionally, supply shortages in affordable and mid-range housing have been exacerbated by legal challenges and financing difficulties faced by real estate firms, further pushing up prices in these segments.
The persistent rise in Hanoi's housing prices is also linked to high land costs, lengthy land-use assessments, and restricted access to credit, which have hindered the expansion of affordable urban housing options. In some provinces, investor practices such as inflating land prices through high bids and later canceling purchases to set artificial price benchmarks have contributed to the ongoing price increases. As the real estate market continues to navigate these challenges, the demand for affordable and mid-range housing remains strong, highlighting the need for targeted measures to ensure balanced and sustainable growth in Vietnam's housing sector.
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In contrast, Ho Chi Minh City (HCMC) saw more stable villa and townhouse prices in prime projects, although certain upscale segments experienced significant declines, with prices dropping by up to 14% quarter-on-quarter and 28% year-on-year for larger properties. Homes priced below VND10 billion enjoyed relatively high transaction volumes during the quarter. The Ministry attributed Hanoi's price increases to rising land costs and recent adjustments in land valuation methods, including land-use auctions that have driven prices higher. Additionally, supply shortages in affordable and mid-range housing have been exacerbated by legal challenges and financing difficulties faced by real estate firms, further pushing up prices in these segments.
The persistent rise in Hanoi's housing prices is also linked to high land costs, lengthy land-use assessments, and restricted access to credit, which have hindered the expansion of affordable urban housing options. In some provinces, investor practices such as inflating land prices through high bids and later canceling purchases to set artificial price benchmarks have contributed to the ongoing price increases. As the real estate market continues to navigate these challenges, the demand for affordable and mid-range housing remains strong, highlighting the need for targeted measures to ensure balanced and sustainable growth in Vietnam's housing sector.
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