Hanoi real estate returning to good health
Analysts from Savills Vietnam tell seminar of the positive performance being posted in the capital’s real estate market and that recovery will continue into the future.
The real estate market in Hanoi is gradually recovering and is expected to see more positive results in the time to come, analysts from consultants Savills Vietnam told a seminar on the real estate market outlook for 2022 it held on August 17.
In terms of the retail market, supply is assessed as being underactive. Demand for retail space is focused mainly on supermarkets, convenience stores, healthcare services, and food and beverage outlets. Meanwhile, fashion and cosmetics show signs of slowing in terms of demand.
According to Ms. Hoang Nguyet Minh, Director of the Commercial Leasing Division at Savills Hanoi, demand for real estate in the retail market reflects growing consumer confidence.
The hotel market in Hanoi is seeing encouraging signs, with average occupancy up by 16 percentage points year-on-year. SEA Games 31 in May helped attract tourists to the capital, including 700,000 domestic visitors and 31,000 international visitors, and 5-star hotels saw significant demand from athletes and tourists alike.
Results in the second half of 2022 are anticipated to be even better, as the effect of the pandemic has begun to ease and tourist confidence is slowly returning. Mr. Matthew Powell, Director of Savills Hanoi, believes the tourism market is recovering and many hotels in the capital are therefore posting high occupancy rates from the return of business and domestic guests.
The villa market in Hanoi will welcome more than 2,131 new units from 13 projects to the end of the year, but these projects face the fact that buyers are losing interest in the city’s housing market. “Sales prices are currently quite high while supply is limited, leading to a low absorption rate,” said Mr. Powell. “Transactions are mainly in the secondary market, between investors. Once supply at a more reasonable price returns, liquidity and operational conditions will improve.”
Demand for apartments is strong in Hanoi, as its population is expected to hit 9.8 million by 2030 and its gross regional domestic product (GRDP) in the 2026-2030 period is forecast to reach 8.5 per cent. Its apartment market will continue to be active, as 14 new projects and the next phase of two existing projects will supply some 11,726 units in the second half of this year.
“Financial requirements are changing, while elements of legislation and border openings have been addressed,” said Ms. Do Thu Hang, Senior Director of Advisory Services at Savills. “When apartment supply becomes abundant in the future, sales prices will adjust to ensure a stable and sustainable market.”
Similarly, Mr. Troy Griffiths, Deputy Managing Director at Savills Vietnam, said Hanoi is seeing strong GRDP growth compared to Vietnam’s GDP growth, so the city’s real estate market is expected to develop further in the second half of the year and beyond.
