Hanoi speculative villa prices downward 40%

Amid jumping interest rates, Hanoi's cash-strapped villa investors are slashing prices by up to 40% to appeal to customers. Thanh spent VND32.5 billion (nearly $1.4 million) on a 180-square meter villa near Ring Road No. 3.5 in mid-2022. He paid for the house with VND11 billion of his own money and a bank loan, expecting his investment's price would double in around 2 years. And then, 2 months later, the property market went down; he put the villa for sale at a discount of 15%, but no buyers were interested. Early this year, he finally sold the mansion for only VND23 billion.

Selling prices of villas in Hanoi 

When the market slumped, Thanh was still considered one of the lucky investors, a local real estate broker in the urban area surrounding the villa project Loi bought into.

"Many other investors of villas at the same project have not found any buyers even after a 15-30% discount."

Tien said: "Since late last year, many investors in the project, most of whom took out bank mortgages to pay for the villas, have slashed their prices by 20-30% to cut losses. An investor has recently sold a 150-square-meter estate for only VND17 billion, incurring a loss of VND8 billion.

Brokers at the Hinode Royal Park development are trying to sell villas at prices of VND6-7.5 billion, down 40% from last year. Tu, also a broker, said she sold 3 villas in the Nam An Khanh project, Hoai Duc District, for VND23.5 billion each early last year, but the price of the same properties has declined over 30% to VND16 billion now. 

Villas offering different prices at many other large-scale developments, including the Ha Do Charm Villas and An Lac Green Symphony, have fallen 25%-30% over the past few years. Speculators buy and sell most villas, and many have been abandoned. 

According to Savills Vietnam, the average villa price on the secondary (resale) market was VND22 billion in the first quarter of this year, 17% lower than the properties' primary market (original) prices.

As a result, some investors have leaned more profound into the secondary market, and many have become speculators. Insiders have also asserted that it is one main reason the primary market has a recession, with a substantial reduction of absorption rate in the past 7 years. 

Do Thu Hang - a senior director of advisory services at Savills Vietnam has shown that the liquidity of the villa market will likely recover, but only for villas bought for residential purposes, not investments. 

After completing Ring Road No. 3.5 and Ring Road No. 4, she added that over 80 property projects along the major new arteries would appeal to buyers. 

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