House Prices in Hanoi Slump
26 July 2011
Residential property prices in Hanoi are dropping, and it is rapidly becoming a buyers’ market, especially for those looking to purchase new property as they are increasingly being offered incentives. Apparently a lot of investors have been selling property to release capital, even at a loss if necessary.
The average price for previously owned homes in Hanoi decreased by 1% during the last quarter, although certain regions saw decreases of as much as 8%.
Prices per square metre for new properties range from US$800-US$3200, but this is 50% less than in the first quarter and in general it's lower priced properties which are achieving the highest rate of sales. Over 50% of the population is aged under 30, and the apartment market in Hanoi has huge potential for the long-term, but part of the current problem is difficulty in financing.
The banks current restriction on loans to non-manufacturing sectors is continuing to hamper both homebuyers and developers efforts to raise finance.
Developers are aiming towards the mid-and lower end of the market, with most new projects being affordable housing, and demand for apartments priced between US$49,000 and US$100,000 has been growing due to population growth, urbanisation and modest wage rises.
In spite of the fact that prices have become more affordable, developers are still expected to face difficult times due to increased availability in the market, with new supply expected to continue to grow during the coming months. However some developers have put their projects on hold as they are waiting for confidence to return to the market, and others are choosing to look towards alternative ways of clearing stock, including renting apartments.