Hanoi property outlook: New supply expected to recover

VNDirect expects to see a c.50% yoy/20% yoy increase in Hanoi new condo supply in 2022–23F to c.25,600 units/c.30,000 units.

>> Real estate developers still face challenges in fundraising

Mr. Chu Duc Toan, senior analyst at VNDirect expects to see a c.50% yoy/20% yoy increase in Hanoi new condo supply in 2022–23F to c.25,600 units/c.30,000 units, dominated mostly by mega projects in the west and east of Hanoi such as Imperia River View, Vinhomes Smart City, Vinhomes Ocean Park, etc. Take-up rate is likely to improve by 100%-100% in 2022-23F, higher than the rate of 75%-90% seen in 2018-19, equivalent to 27,000-30,000 sold units per year, on the back of pent-up demand.

"We forecast Hanoi condo primary prices will continue to enjoy healthy momentum (4%-6% yoy on average in 2022F, of which the mid-end segment is likely to record the strongest growth of 9% yoy given its high demand," said Mr. Chu Duc Toan.

In 2022F, the new supply of landed property market may continue to rely on the launch of townships. In 2022, new supply is expected to remain flat at 2,500 units, dominated primarily by new mega townships such as Vinhomes Wonder Park and Vinhomes Co Loa, as well as the launch of next phases from townships such as EcoPark and Gamuda City.

Mr. Chu Duc Toan expects a softer land price momentum in 2H22F while villas and townhouse projects at the end of the line of the Cat Linh-Ha Dong metro line should enjoy price increases, which increased by 5% qoq in 1Q22, according to Savills.

Hung Yen could take the spotlight in Hanoi’s neighbouring provinces' ready-built housing market thanks to Vinhomes Ocean Park 2 - The Empire (Vinhomes Dream City) launches of more than 10,000 landed property units in 1H22. Additionally, we see Vinhomes Ocean Park 3-The Crown (Vinhomes Dai An) (294ha) project adjacent to Vinhomes Ocean Park 2 being under construction and is likely to be launched in 2023.

>> Removing land price table to prevent real estate overheating

"We believe average primary prices for landed property in Hung Yen will keep increasing higher than that of Hanoi in 2H22F, boosted by its acceleration in infrastructure development and high-quality projects from Vinhomes. Besides, we see high housing demand for experts, engineers in Hung Yen in the next 2-3 years following the launch of new industrial parks such as Pho Noi A IP, Thang Long II IP, Yen My II IP, etc., said Mr. Chu Duc Toan.

Mr. Chu Duc Toan expects VHM to dominate the Northern Vietnam real estate market in 2022–23F with three new township project launches. "According to our site visit trip in June 2022, we see Vinhomes Ocean Park 2 has successfully launched more than 10,000 landed units with a high take-up rate. We expect this project to be handed over in 2H22 based on its current aggressive construction activities," steered Mr. Chu Duc Toan.