Outlook for Hanoi home prices in 2023 as buyers, values slide from a slump

A new report shows that the number of potential buyers seeking properties in Hanoi has declined from the height of a slump. With rising interest rates weighing on the market, demand for homes in Hanoi decreased 39% year-on-year, alongside slowing home prices. Since the end of the Covid-19 Pandemic of 2020-2021, the report was the first annual report card when provincial house prices rose at their fastest rate in 35 years.

Values slide of Hanoi home prices from a recession

The report found that the drop in relative affordability from rapidly rising prices, over time with the complete lifting of health restrictions, has unraveled from regional properties.

But the decline in relative affordability from rapidly rising prices, over time with the complete lifting of health restrictions, has unraveled from regional properties, the report found. Long Bien and Bac Tu Lem were among the regional suburbs to look at the most significant decline in demand per listing. 

Throughout 2020 and 2021, we went through the pandemic, numerous lockdowns, and spent more time at home, leading to many thoughts about their housing needs and requirements. Housing markets in Hanoi thrived as people sought more space and suitable homes. Remote working opportunities and preference shifts drove strong population growth in regional areas at the expense of the capital. As public health restrictions have eased and interest rates have strongly risen, the boom has been changed with slower growth and elevated uncertainty. 

Dropping demand and tightening credit have impacted home prices and the time it carries to sell properties in the region. The sales volume in Hanoi has dropped 27 percent this year, as home prices fell 4.9% percent from their peak at the end of this year. 

The secondary market in southern Vietnam has become vibrant recently, with investors facing a financial crunch selling properties at 15-20% discounts. In fact, since last month, many property developers have been selling apartments and villas at 40-50% price reductions to buyers who pay in full.

Industry insiders said regional prices were forecasted to continue to drop amid the monetary tightening and decreased net migration flows to regional areas at a slower level than the capital cities.

Insiders' opinion on the current real estate market situation

Tran Khanh Quang - Chief executive officer (CEO) of Viet An developer, said that the selloff at the end of this year is just the start. More financial challenges await the property market in the following years, particularly for those who use loans to make investments. Further, go-downs in prices are anticipated next year, with prices discounting half of what they are now. Besides, Phan Cong Chanh, CEO of Phu Vinh Group, said numerous elements could affect the real estate market in the following year, including policy decisions of the U.S Federal Reserve, amends in the land laws, credit tightening, corporate bond issuance, etc. "Investors should be prudent at this time. There might not be specific solutions to these concerns until middle-2023, and impacts of new policies might not be adequate until the following 6 six to 12 months.", he added. 

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Source: bdstanlong.com