The real estate markets in Vietnam’s two largest cities, Hanoi and Ho Chi Minh City, indicated signs of recovery amid protracted woes in the final months of last year, according to a Savills report.

Giang Huynh, head of Research and S22M at Savills Vietnam, said, “Residential stock in major cities remains low, pushing demand to neighboring provinces. The commercial outlook is sound, with office stock increasingly green.”

In Hanoi, apartment stock of the primary market in the final quarter of 2023 dropped by 41% year-on-year to 11,911 units. Primary asking prices of net sellable area rose to VND58 million per square meter, up 12% against the same period previous year.

Do Thu Hang, senior director of Advisory Services at Savills Hanoi, said demand and supply for affordable properties were misaligned. Average primary prices in the city have inched up for 20 consecutive quarters. 

In HCM City, the supply of primary apartments in quarter four of 2023 remained limited, with only 7,600 units available, a 5% decrease compared to the previous year.

Experts forecast by 2026, the outlying districts are expected to account for 74% and 75% of the new supply of landed properties in Hanoi and HCM City, respectively. The tendency may be attributed to favorable conditions such as regional connectivity and affordable prices.

Office and retail markets performed well in both cities, with healthy demand, rising rents, and high occupancy. Retail occupancy in the final quarter of 2023 in Hanoi reached 88% while it was 92% as for HCM City.

According to Savills analysts, Vietnam’s real estate market will strengthen this year, led by foreign direct investment inflows, consumer demand, and infrastructure development.

Saigon Times