Hanoi running out of luxury apartments

By An Chi - Jan 13, 2018 | 06:48 AM GMT+7

TheLEADERThe Class A apartment segment in Hanoi recorded a strong boom last year with the liquidity tripled year on year while the supply was exhausted.

Hanoi running out of luxury apartments
The project Vinhomes Metropolis (29 Lieu Giai) has a good liquidity.

Contrary to fears of a surplus supply for many years, the liquidity of the luxury apartment segment in Hanoi last year was high.

The number of Class A apartments offered for sale last year accounted for about 10 percent of the total apartment supply of in the Hanoi market, equivalent to about 2,900 units, according to the statistics of Savills.

The liquidity of this segment is at a record high of more than 80 percent, tripling compared to 2016. Savills said that the number of Class A units sold was the highest in the past eight years.

Do Thu Hang, Head of Research and Consultancy - Advisory Services of Savills Hanoi said that this situation can be attributed to the fact that the supply to the market increased, but the total supply is not high while the demand is still strong.

On the other hand, most of these projects are located at favorable locations in the inner city of Hanoi. Therefore, despite the high prices, they are still sought by buyers, Hang said.

According to the Vietnam Realtor Association, the supply of luxury apartments decreased not because it lost attraction, but because of the lack of suitable land plots in central districts. Therefore, these projects are always out of stock.

While Class A apartments are running out, the Class B stock is rather large. Hang said that the liquidity in this market is the lowest due to the huge supply, which cannot be absorbed in a short time.

The situation is opposite in the Class C segment as the new supply in 2017 is significantly lower than in 2016 while the demand is still high. The price of low-cost houses is mostly over US$662 per square meter.

Hang disclosed three investors with the highest sales in the property market in Hanoi to be Vingroup, Tan Hoang Minh and Sungroup. Meanwhile, three investors have the most units sold are Vingroup, Tan Hoang Minh and Geleximco.

Savills forecasts that 26,300 units will enter the market in 2018, with the lead of Class B apartments in the supply.

Also, the new supply in 2018 is expected to continue to increase sharply compared to 2017, and this will leave home buyers with more choices, Hang said.

However, this also poses a great challenge for owners, especially of the mid-end segment. If they cannot create a difference in branding and their product quality cannot satisfy the customers, it will be difficult to increase the liquidity.

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