Inner-city real estate maintains high price

According to the Hanoi Capital Planning by 2030, the permanent population is expected to reach around 11 million people, an increase of 9 million, with an additional 1.5 million non-permanent residents. The urbanisation rate is projected to reach 70% by 2030, rising from the current level of 49%. 

As such, Ha Noi requires a substantial increase in new housing supply. Do Thu Hang, Senior Director, Advisory Services, Savills Ha Noi stated that despite the improved performance in recent years, the housing supply does not meet the high demand. The supply-demand imbalance has driven housing prices in central Ha Noi to continuously rise. 

Savills Q4/2024 Report revealed that the average secondary market price of urban residential projects in the inner-city area ranges from VND 190 to 450 million per sq m. For villas and townhouses, the prices range from VND 160 to 270 million per sq m. For high-rise apartments, the average secondary price in central districts is approximately VND 65 million to over 300 million per sq m.

The Senior Director also emphasises that elevated price levels have notable effects on the end-user buyers, particularly those seeking affordable housing properties aligned with their financial capacity. Buyers are finding it challenging to open home mortgage loans or financial leverages to secure housing in central areas.

Limited land availability

Driven by high housing prices in central districts and constrained accessibility, there is a growing trend of residential demand shifting toward suburban and outlying areas.

The movement toward peripheral areas has become more apparent as the available land bank in the inner city continues to shrink. Even areas adjacent to Ring Road 2 and Ring Road 3 have run out of land for new project development. This trend is further driven by population decentralisation policies and integrated infrastructure development approach outlined in the Revised Master Plan for Ha Noi Capital.

Do Thu Hang, Senior Director, Advisory Services, Savills Ha Noi 

Population decentralisation policy

The broader objective set in the Hanoi Capital Planning until 2045, with a vision to 2065, is to develop a modern, smart, green, and sustainable urban city. To execute, Ha Noi is adjusting its urban development planning orientation, with a key focus on decentralising the population out of the inner city to reduce infrastructure pressure and rebalance population density. 

Residential buildings in preservation areas such as the Old Quarter, the French Quarter, Hoan Kiem Lake, Ba Dinh, West Lake, and the Thang Long Imperial Citadel, will relocate to facilitate the redevelopment of these zones into spaces for tourism, commerce, and cultural activities. 

To implement a population decentralisation strategy, Ha Noi is increasing its investment in transportation infrastructure, technical systems, and social amenities in suburban areas. Three key areas have been prioritised for development: the West & South, the East, and the northern Red River. These areas have been chosen based on their specific attributes and are all being developed under the Transit-Oriented Development (TOD) model.  

They will be integrated with Ha Noi’s modern urban transportation network, including radial, ring road systems, and metro lines. Ring Road 3.5 and Ring Road 4 will serve as key transportation corridors, enhancing connectivity from these areas to the city centre and increasing housing demands. 

Highlighted large-scale suburban projects

Sr. Director Hang also shares that large-scale suburban projects will be implemented in a synchronized manner and coordinated with the development of transportation infrastructure and internal amenities, attracting a significant volume of transactions.

For example, Vinhomes Ocean Park in Gia Lam recorded a sharp increase in demand in Q4/2024, with a sales rate exceeding 50%. Other projects in Dong Anh, Me Linh, Thuong Tin, and Long Bien are also experiencing strong demands. Dong Anh is leading the market, accounting for 84% of total primary transactions, an equivalent of 2,799 units sold. This is followed by Me Linh and Thuong Tin, each representing 4% of total transactions, or approximately 140 units sold in each area.  

Large-scale suburban projects experienced a sharp increase in demand in Q4/2024

Advices for homebuyers

However, the development of suburban infrastructure faces challenges as large-scale projects may take several years to complete, and high investment costs can place pressure on public budgets and drive-up land prices. In addition, speculation triggered by planning announcements may lead to real estate prices exceeding the actual market values.  

Sr. Director Hang advises homebuyers to carefully consider key factors such as infrastructure development timelines, the competence and reputation of developers, and the legal transparency of projects to mitigate risks when investing in housing linked to new infrastructure developments.