Real estate more expensive in Hanoi than HCM City

25.01.2017

VietNamNet Bridge – While Hanoians have lower incomes on average than Saigonese, they pay more for housing because of higher construction costs.

While the average income per Hanoi capita is $3,600 per annum, the figure is $5,538 in HCMC. However, according to Savills, a real estate service provider, Hanoians have to pay more to buy apartments with the same value.

Do Thu Hang from Savills Vietnam noted that real estate developers set higher sale prices for Hanoi market. Since the expenses that constitute the house development costs in Hanoi are higher than in HCMC, the selling prices must be higher.

Those, who want to buy houses in Hanoi are not only the ones who were born and grow up in Hanoi, but also the ones who have children and relatives studying or working in Hanoi, or in the industrial zones in neighboring provinces. 

Hanoi is an educational, political and economic center of the country, so the demand for house is not only from residents but also from other localities. People buy houses not only for accommodation, but also for leasing or trading. Therefore, the market is bustling, especially the apartment market segment.

HCMC is also an educational and economic center of the country and there is also demand for houses from people from neighboring localities. However, the supply and demand there is quite different.

Savills said while the apartment absorption rate in Hanoi was 31 percent in the fourth quarter of 2016, the figure was 22 percent in HCMC only.

The absorption rate is calculated by Savills by the total number of apartments sold of the total primary supply.

In Hanoi, 6,730 apartments were sold, while the total primary supply was 21,670.

In HCMC, 10,200 apartments were sold, and the total primary supply was 45,200.

As such, though the demand was higher in HCMC than in Hanoi because of the larger area and higher population, the absorption rate was still lower than in Hanoi.

Savills estimated that from now to 2018, HCMC would have 60,000 more apartments to be marketed.

Hanoians had never before bought so many apartments as they did in 2016. 

Having a lower population, Hanoi had more apartments marketed in the fourth quarter of 2016 than HCMC. In 2016, Hanoi made a record in both supply and number of apartments sold.

In Hanoi, 10,280 apartments were put on sale, a sharp increase of 81 percent quarterly and 28 percent annually. The average price was $1,230 per square meter, or VND28 million.

It is expected that about 50,000 apartments from 77 projects would join the market in 2017. Most of them are B-class apartments in the districts of Hoang Mai, Thanh Xuan, Tu Liem and Ha Dong.

Source: Vietnam.net

Photo: CBR Investment AG