Hanoi's villa and townhouse segment attractive in 2022
A view of Vinhomes Riverside Villa area in Long Bien district, Hanoi. ( Photo: alphahousing.vn)
Hanoi (VNS/VNA) - Hanoi's real estate market, especially the villa and townhouse segment, will prosper in 2022 thanks to economic stimulus economic programmes.
“Vietnam is entering a new normal, adapting to the pandemic and promoting economic growth. We are facing opportunities to recover and develop, including in the real estate market. This leads to the need for supply to meet the needs of the market,” Do Thu Hang, Senior Director, Advisory Services, Savills Hanoi, said at a conference on the property outlook in 2022 held in Hanoi last week.
To overcome the difficulties and challenges of the past two years due to the pandemic, property businesses are forced to innovate in terms of perspectives and approaches to achieve more sustainable development, Hang said.
Urban real estate investors are paying more attention to health issues. Therefore, the real estate market tends to develop according to environmental friendliness, she said.
“Primary stock has been limited for a long time. However, there will be new supply in 2022, mostly in the large urban areas outside Hanoi. Where the infrastructure improves, then supply, sales, and prices will also increase,” said Matthew Powell, Director, Savills Hanoi.
In 2022, more than 3,000 dwellings from 13 projects will enter the market. Forty-one percent will be in Hoai Duc, followed by Dan Phuong with 26 percent. Western districts including Ha Dong, Hoai Duc and Dan Phuong will have the largest supply in 2022 with over 2,200 dwellings, according to a Savills Vietnam report on Hanoi's property market released at a press conference on February 17 in Hanoi.
Eastern Hanoi will also have strong growth with new supply from Ecopark and a new major project, Vinhomes Dream city in Van Giang district, Hung Yen province.
Hanoi recently collaborated with Hung Yen, Bac Giang, Bac Ninh and Vinh Phuc provinces for the approval of the investment plan for Ring Road 4. Villa and townhouse projects in Hanoi and other provinces that are located near these Ring Roads would greatly benefit.
In the fourth quarter of 2021, villa and townhouse performance improved with 411 sales, increasing 96 percent quarter on quarter but decreasing 19 percent on year. Tay Ho had the most sales with a 40 percent share, followed by Dong Anh with 21 percent. Townhouses and shophouses had 57 percent share of sales; villas has a 43 percent share, the highest since the first quarter of 2020. Quarterly absorption of 37 percent increased 17 percentage points quarter on quarter and 4 percentage points on year. New launches were 83 percent absorbed.
Performance improved, especially new launch absorption thanks to pre-sales activities.
Most projects started early with diverse capital raising methods including capital contributions, investment cooperation, or business cooperation contracts.
Neil MacGregor, Managing Director of Savills Vietnam, said: “For residential property, townships will be key in 2022. There have been several key townships developed over the last couple of years in Dong Nai, Long An and Binh Duong. This will continue to be a trend as residential stock in HCM City is limited. Investors and developers will invest in these townships, especially as infrastructure linking these areas to the city improves.”
For the Hanoi apartment market, “in 2021, launches and sales were at a five-year low due to prolonged lockdowns, but towards the end of the year there were signs of recovery with increased activity. Local developers and branded operators are collaborating on upscale projects; however, there is a supply imbalance and more affordable stock is needed,” Hang said.
Meanwhile, “the Industrial and Logistics sector will continue to boom. This sector has been hot for the last couple of years, and it will continue to gain momentum as manufacturers start to build their facilities in Vietnam,” said MacGregor.
There are several new and growing sectors to keep an eye on too. For example, there will be growth in warehouses distribution, e-commerce services, data centres and cold storage.
“The Vietnamese market may not necessarily have new products, but there will be products that the market needs,” said MacGregor.
“Data centres will be a key growth area as the booming internet economy needs space to store its data. So, there will be huge interest in developing data centres. Although this is not an easy sector for investors to move into, we expect there will be development.”
“There will be a demand for cold storage serving e-commerce, retail, and import/export demand. Hospitality’s return will also create demand for cold storage. Lastly, one trend that we will see is digital property investment, which appeared pre-pandemic and was fast-tracked over the last two years. People started to buy shares in real estate products online, and we expect this trend to continue to grow in 2022.”
Source: Vietnam Plus