Primary prices in areas like Thu Thiem New Urban Area have risen in recent times, photo Le Toan

According to figures from CBRE Vietnam, while Ho Chi Minh City continued to face limited new supply with only around 5,300 new units in 2024 (including both condominium and landed property), new residential supply in Hanoi increased significantly with nearly 38,000 new launched units.

Further figures released last week showed that new condominium supply in Hanoi in 2024 tripled the new supply of 2023 and exceeded 30,900 newly launched units.

“This was the highest annual new launch recorded since 2020 in Hanoi. Meanwhile, new condominium supply in Ho Chi Minh City reached the lowest level since 2013, with only 5,050 new launched units this year,” said Duong Thuy Dung, executive director of CBRE Vietnam.

At the end of Q4, the average primary selling prices of condominiums in Hanoi averaged $3,000 per square metre. Within the year, the primary selling price of condominiums in Hanoi witnessed a sharp increase, up by 36 per cent on-year and 12 per cent on-quarter.

“This was the highest increase recorded in the past eight years in Hanoi’s condominium market,” Dung said.

The majority of the new supply in Q4/2024 came from high-end projects with complete legal status and developed in mega townships in Nam Tu Liem and Gia Lam districts, where residents have already moved in. This has resulted in an increase in primary selling prices as well as sales rates exceeding 70 per cent among launched projects.

In Ho Chi Minh City meanwhile, condominium primary prices averaged at $3,150 per sq.m in Q4/2024, up by nearly 24 per cent on-year. The significant increase was driven by the fact that over 70 per cent of the new supply came from high-end and luxury projects launched this year.

Meanwhile, the launches of existing projects saw primary prices increase by 10 to 40 per cent compared to earlier launches. The OpusK, the last subdivision of the luxury complex Metropole Thu Thiem, established a new price ceiling for Thu Duc city. It is located in the Thu Thiem New Urban Area with a limited number of only 150 units.

Currently, the highest priced project in Ho Chi Minh City is the Marriott luxury complex developed by Masterise Homes, located in the heart of District 1 at nearly $21,000 per sq.m. Despite setting a high asking price, developers offered various attractive sales policies such as extended payments of up to five years, or discounts from 5 to 16 per cent for standard payments.

As a result, new projects launched in Q4 witnessed an absorption rate of around 70 per cent out of total supply. Among which, there have been several high-end to luxury projects with convenient access to the central business district, achieving nearly 100 per cent sales.

In addition, the opening of the Metro Line 1 from the end of December has led to projects along the metro line, typically in District 2 and District 9 of Thu Duc, recording secondary selling price increases of 2-3 per cent on-quarter and nearly 15 per cent on-year on average.

According to Nguyen Thanh Huong, investment director of Nam Long Group, it is very difficult to stop the increase in house prices.

“There is a high possibility that real estate prices will continue to go up in 2025. However, much will depend on the supply, distribution ratio between segments and the investor’s balance between how to approach potential customers but still balance profits,” Huong said.

Huong believes that the rapid increase in house prices will cause all market participants to suffer, and no one will benefit. “It is also difficult for investors, like us, to have to spend more to have land for new projects, while buyers have difficulty accessing homeownership opportunities,” Huong added.

Tran Thanh Hai, an investment head at VinaCapital, predicted that house prices are going to increase in the next one to two years because the new land price list is being applied.

“Businesses themselves are also under considerable pressure when land prices increase sharply, along with land use costs that investors must pay. These factors will push the final selling price to levels that are difficult for buyers,” Hai said.

He also warned that overheating could lead to a situation similar to what happened to in China. “Balancing house prices will be a problem that needs to be seriously implemented by all parties in the coming years,” he said.

To reduce the pressure on rising house prices and meet real housing needs, Hai recommends expanding urban development to suburban areas and areas adjacent to Ho Chi Minh City.

According to Dung of CBRE, this year will mark the beginning of a new cycle in the residential market, with abundant supply and improved product quality driven by increasing competition among developers.

“The market is expected to become more stable and sustainable as it has time to adapt to the revised laws, as well as new circulars and implementation guidelines. This will create a clear legal environment, encouraging developers to participate in project development while opening opportunities for more people to access and purchase housing more easily,” she added.