HO CHI MINH CITY: Investment flows in the real estate sector are showing signs of shifting to the south after a period of concentrating mainly in Hanoi, experts say.
Speakering at the Vietnam Real Estate Summit 2024 (VRES 2024) organised by Batdongsan.com.vn in Ho Chi Minh City last week, Dinh Minh Tuan, southern regional director of the real estate trading platform, highlighted that the Vietnamese real estate market in 2024 is clearly differentiated between the north and south, high-rise and low-rise dwellings, and central and suburban areas.
Regarding the north-south differentiation with the two major cities Hanoi and Ho Chi Minh City, he said the average real estate listing price in Hanoi saw significant increases across most segments.
Specifically, in November, the average selling price of apartments in Hanoi reached 61 million dong or about US$2,400 per sq m, surpassing that in Ho Chi Minh City of 55 million dong per sq m, he said.
For private houses, the selling price in Hanoi recorded strong growth, reaching 197 million dong per sq m, an increase of 58% from January 2023, compared to a decline of 10% in Ho Chi Minh City, where the average price was 108 million dong per sq m.
Land prices also reflected this trend, with Hanoi at 70 million dong per sq m compared with Ho Chi Minh City’s 57 million dong per sq m.
Although most of the new supply was at higher prices, the absorption rate in the capital city was still quite positive, Tuan said.
He underscored that the investment flow seems to be shifting southward after a period of concentrating mainly in Hanoi.
Data from Batdongsan.com.vn revealed a 7% increase in people from Hanoi searching for properties in Ho Chi Minh City in November, while interest from Ho Chi Minh City in Hanoi properties dropped by 12%.
A survey by the property listing platform showed that 66% of people from Hanoi are interested in real estate in the south.
Despite the potential in southern markets, legal challenges remain a significant concern for investors and buyers, requiring careful due diligence, he noted.
Le Bao Long, marketing director of Batdongsan.com.vn, said its survey showed that legal factors are the top concern for buyers when choosing real estate.
Additionally, infrastructure plays a crucial role in influencing investment preferences.
This is particularly with a shift toward the southern region.
Long revealed that key real estate markets prioritised for investment in the coming year include Da Nang, Binh Duong and Dong Nai.
In terms of high-rise and low-rise segment differentiation, Tuan said apartments have witnessed a substantial increase in terms of demand and prices.
The biggest growth driver of apartments comes from demand for housing from young people, with 73% of respondents under 35 identifying apartments as the most preferred property type in 2024.
In contrast, low-rise properties face challenges due to their high value and limited financial support programmes.
Additionally, rising consumer spending on eCommerce is reducing demand for low-rise rental properties, he pointed out.
He also noted that central areas continue to attract higher interest and price growth due to their connectivity and job opportunities.
Infrastructure, such as new metro lines, have further boosted demand, particularly for apartments. — Viet Nam News/ANN