According to data for Q1 of this year, the cost of apartments in Hanoi increased by 16.08% year-over-year. The average price per square metre of housing in the capital of Vietnam reached $2,007. In Ho Chi Minh City, apartment prices increased by 10.32%. The price per square metre amounted to $3,229.
However, the rise in prices did not improve the overall situation in the real estate market. According to statistics from the consulting group CBRE, supply and demand remain critically low. In Hanoi alone, house sales dropped by 78%. Apartment transactions were down 58% compared to Q1 2022. In Ho Chi Minh City, these figures are 71% for apartments and 80% for houses.
Although the Vietnamese real estate market is now open to overseas investors, they are wary of this destination. The legislation was changed 8 years ago, and now expats can own housing as private property. However, land can still only be leased. Foreign buyers are put off by the unclear regulatory framework, the ambiguity of which is pointed out by even Vietnamese estate agents. Local buyers cannot always afford new homes due to the lack of affordable community projects.
The market is just beginning to recover from the pandemic, so the number of offers remains low. Construction companies are in no hurry to implement new projects, which causes a shortage of housing supply. In Hanoi, it decreased by 27%, while Ho Chi Minh City showed a 2% lower figure. It is expected that the situation may improve by 2024, when developers complete current projects and deliver the planned volume of real estate. Although experts say that one cannot reckon on a dramatic improvement in the situation, since the development of the market is also hampered by the tightened credit policy of banks.