Increasing Housing Demand Raises Apartment Prices in Major Urban Areas
Increasing Housing Demand Raises Apartment Prices in Major Urban Areas
According to a survey by Savills Vietnam, the average selling price of basic apartments in Hanoi is currently 47 million VND/m2, showing a 5% quarterly increase in 2022 and a significant rise compared to 2021.
In comparison to Q1/2019, the current basic apartment prices have surged by over 53% after 16 consecutive quarters of increase. In the context of scarce supply, it is anticipated that apartment prices in 2023 will remain high due to limited supply, while demand continues to stay consistently high.
In 2023, the global real estate market is projected to slow down, and the Vietnamese market is not expected to be immune to these effects.
However, according to forecasts from the Vietnam Real Estate Brokers Association (VARS) announced at the "Real Estate Market Pulse and Forecast" seminar, the social housing and affordable housing segments are expected to grow due to the ongoing urban development attracting investor interest.
A representative from the Ministry of Construction stated that the forecast for housing demand in the 2021-2030 period indicates a continued increase, especially in urban areas.
The urban population ratio is currently around 40%, expected to rise to approximately 45% by 2030. With the current population growth rate and housing demand, an additional 70 million m2 of urban housing needs to be added each year.
The high population-attracting cities, Hanoi and Ho Chi Minh City, require rapid expansion of urban housing areas. These two cities account for over 50% of the country's urban land area and contribute to 75% of urban space growth, fulfilling about 2/3 of the annual housing demand.
In the context of a sluggish market, the development of social housing serves both to meet the essential needs of policy beneficiaries and as a lever to stimulate economic flow, benefiting 38 other related real estate market sectors.
According to the Ministry of Construction's statistics, as of now, 301 social housing projects in urban areas have been completed nationwide, providing approximately 155,800 units, equivalent to a total area of 7.8 million m2.
The achieved supply of social housing still falls considerably short of expectations. The government, led by the Prime Minister, is directing the Ministry of Construction and relevant ministries to focus on resolving these issues with determined solutions, contributing to the promotion of social housing and the development of a safe, healthy, and sustainable real estate market.
