Hanoi is set to receive a significant future supply of over 100,000 apartments starting from 2025, a tenfold increase compared to the current availability.
Nguyen Thi Hong Van, Deputy Director of Valuation and Financial Advisory at Savills Hanoi, highlighted that one of the major changes brought by the amended Land Law is the removal of the land price framework.
This change allows local authorities to set land prices annually based on market conditions, rather than every five years as previously required.
Van noted that this shift would enable the real estate market to more accurately reflect the true value of land. Additionally, the Land Law 2024 stipulates that land can only be reclaimed after resettlement housing has been handed over. This regulation is expected to streamline the compensation and land clearance processes, accelerating project development.
However, she warned that aligning compensation rates with market prices, coupled with stringent compensation regulations, will increase investment costs for real estate projects, leading to higher product prices.
Savills reported that in the second quarter, no new supply was priced below VND 45 million per square meter, and since 2020, the primary supply of grade C housing has decreased by 45 per cent annually.
In the short term, housing prices, especially for apartments, are likely to continue rising due to the limited new supply.
In the second quarter, apartment supply fell by 34 per cent compared to the previous quarter and 25 per cent year-on-year, totaling around 2,700 units. Notably, 98 per cent of this supply came from existing projects, with virtually no new projects launched.
As the supply of apartments in Hanoi's suburban areas increases significantly from 2025 onwards, it may become challenging for prices in these areas to maintain their current rapid growth. This shift could reduce the upward pressure on housing prices in the long term, particularly in suburban regions.
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