JLL: Hanoi apartment transactions are bleak, many high-end projects must apply incentives

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Demand for apartment investment in Hanoi was bleak, causing sales to decrease by 13% q-o-q. High-end apartments have little transaction, especially in the buy-to-let segment, as the number of foreign experts allowed to enter is limited.

According to the first quarter report of JLL Vietnam, the total number of apartments officially launched for sale in Hanoi reached 3,645 units, an increase of 37% compared to the previous quarter. Supply mainly comes from Panorama Hoang Van Thu projects in Hoang Mai district, The Zen Park in Vinhomes Ocean Park and Grand Sapphire subdivision in Vinhomes Smart City, accounting for 56% of total new launches.

The rest of the baskets are mostly small, ranging from 100 – 300 units per project. Notably, the majority of newly launched projects are in the completion stage and have been introduced to the market many quarters ago, but are only eligible to open for sale this quarter due to the completion of projects. Required legal practice.

JLL believes that the demand for apartment investment is still bleak. The outbreak of epidemic outbreaks together with the prolonged Lunar New Year holiday somewhat affected the psychology of investors to buy and invest, causing sales to decrease by 13% q-o-q. Transactions recorded at the high-end projects were relatively bleak, especially in the rental segment, due to the limited number of foreign experts allowed to enter.

As observed by JLL, individual investors tend to choose land plots and townhouses in neighboring satellite cities of Hanoi thanks to the more attractive return on investment compared to apartments, especially in Land fever is happening in these areas in recent times. However, the trend of developers of large-scale integrated projects wholesaling the whole building or cooperating with secondary developers continues to increase in the market.

Apartment prices continued to rise but increased more slowly than in the previous quarter. The average primary selling price reached USD 1,555 per sqm (VND 37 million/sqm). Although the selling price listed at the projects shows no signs of decreasing, in order to improve the sales performance, the investor continues to offer incentive programs such as: 0% interest rate support package, end-of-year discount and extended payment term allowing buyers to stay prepaid post-payment. This phenomenon is more pronounced in the high-end segment from last year and continues in the first quarter of this year.

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Source: JLL Research Department

JLL believes that the supply is forecasted to continue to improve until the end of 2021, ranging from 20,000 to 25,000 units, mainly coming from the low-cost segment. Demand for housing is expected to remain stable. The apartment market for high-end projects is expected to improve as international routes resume in the second quarter. Going forward, the areas north and east of Hanoi are expected to be the focus of the market thanks to the recently announced Red River urban plan.

Apartment prices are forecast to increase but tend to slow down. Projects that are nearing completion will continue to offer incentives to attract cautious customers to solve the remaining inventory.

Source: ndh.vn – Translated by fintel.vn