What is the outlook for the Northern Vietnam property market?

Hanoi condo primary prices would continue to enjoy healthy momentum +5%-7% YoY on average in 2022F, said VNDirect.

Vinhomes also plans to launch a 460ha mega township in Hung Yen in 2022F. Photo: Vinhomes Dream City in Hưng Yen

Ample supply

VNDirect expected to see a c.40% YoY increase in Hanoi's new condo supply in 2022F to c.25,600 units, then recovery to 2018-19 levels in 2023F with c.36,100 units (41% YoY), dominated mostly by units in the west and the east of Hanoi. Takeup rate is likely to improve by 90%-110% in FY22-23F, higher than the rate of 75%-90% seen in FY18-19F, equivalent to 27,000-32,000 sold units per year.

Meanwhile, the new supply of landed property market will continue to depend on launches of townships in 2022F. According to CBRE, the new supply is likely to plunge c.40% YoY to 1,500 units in 2022F due to the lack of Vinhomes’ massive project. The market is expected to welcome new products from new mega townships such as Vinhomes Wonder Park, Vinhomes Co Loa, and launches of next phases from townships such as EcoPark, Gamuda City.

Hung Yen as a spotlight

VNDirect sees landed property markets at Hanoi’s neighboring provinces that enjoy the convenient connection to Hanoi CBD, such as Hung Yen are likely in the spotlight in 2022F. Vinhomes also plans to launch a 460ha mega township in Hung Yen in 2022F. This stock company considers Hung Yen as one of Northern emerging property markets, along with Bac Ninh and Quang Ninh. This province is situated at the heart of the Northern Delta, having a favorable connection to Hanoi, Hai Phong, and Nam Dinh. According to CBRE, in 2020, selling prices for landed property in Hung Yen rose 12% YoY, higher than the Hanoi average rate of 7.6%.

New landed supply in Hung Yen could reach 2,500 units in 2021F, 16.8% higher than that of Hanoi, mostly from mega township projects. VNDirect believed these projects would achieve a take-up rate of 70-80% in 2021F, driven by high demand from experts, engineers, and workers in this area.

An uptrend in housing prices

VNDirect believed Hanoi condo primary prices would continue to enjoy healthy momentum 5%-7% YoY on average in 2022F. Meanwhile, it expects to see new pricing levels in the luxury segment set by the Masterise project in Hang Bai with a price, based on industry estimates, of US$8,000-10,000 psm. For landed market, it believed landed prices of the suburb in Hanoi would continue to be in an upward trend in 2022F thanks to infrastructure development, especially the launch of Cat Linh, Ha Dong metro line in Nov 2021 should boost land prices in its surrounding areas such as Ha Dong, Dong Da.