Hanoi has high demand for Grade A apartments in Quarter 3

The real estate market of Hanoi saw high demand for Grade A apartments for rent and sale in the third quarter, according to Savills Vietnam’s quarterly report on Hanoi's property market.

hanoi has high demand for grade a apartments in quarter 3 hinh 0
The real estate market of Hanoi saw high demand for Grade A apartments for rent and sale in the third quarter. (Illustrative image. Source: VNA)

During the third quarter, about 4,330 new serviced apartments were offered on the Hanoi market, decreasing 8 percent quarter-on-quarter (QoQ) after the closure of two projects and the entry of one. Grade A had the strongest take-up while Grade B and C suffered decreases in leased units, said Do Thu Hang, Director of the Research and Consultancy Department at Savills Vietnam’s branch in Hanoi.

Grade A apartments must be built near convenient transportation systems, with good facilities and convenient social and service infrastructure. They also need a professional management and operation company.

Average market-wide rent increased 4 percent QoQ and occupancy remained high at 84 percent. Within the Grade A segment, branded operators charged 19 percent more for rent than non-branded counterparts, Hang said at a recent press conference on releasing the third quarter report on Hanoi property market.

Meanwhile, in the third quarter, 11 new and the next phases of nine projects of apartments for sale provided approximately 8,100 units, up 23 percent QoQ and 17 percent year-on-year. Grade B remained the largest supplier, accounting for 67 percent of the market share, said Hang.

Hang said sales were down 1 percent QoQ but up 50 percent year-on-year due to high supply from Vingroup over the past year. Eastern districts had the highest sales in the quarter with a 40 percent share.

Meanwhile, the HCM City market was more attractive than Hanoi in terms of selling price, rent, rate of return and profit margin, Nguyen Ngoc Hieu, Head of Market Research Department of  Batdongsan.com.vn, said at an event in Hanoi on December 31, 2019 to release its third quarter report on Hanoi and HCM City property markets.

" HCM City is known as a leading city in economic development, most foreign companies in Vietnam choose HCM City for their representative offices," Hieu said.

This city has more diversification in real estate products than Hanoi, he said. Besides that, it has attracted many workers and foreign experts so strong growth in population has made demand for accommodation and investment in HCM City's property market much higher than in Hanoi in all segments.

Hieu also said that demand for accommodation and investment in HCM City is always higher than Hanoi. Many investors from Hanoi have chosen HCM City to put their capital.

Batdongsan.com.vn’s data about the asking prices of apartments between Vietnam’s two biggest real estate markets shows that in the third quarter, the average asking price of apartment in HCM City was 25 percent higher than Hanoi's. The gap reached nearly 40 percent for apartments in the central areas of these cities.

Not only in the apartment segment, the average growth rate of house and townhouse prices in HCM City was also higher than in Hanoi. The price of houses in Hanoi was up about 10 percent, while it was up to 26 percent in HCM City.

Townhouses in the southern city also saw an average price increase of 12.6 percent, compared to 7.6 percent in Hanoi.

VNA