Hanoi’s housing market is poised for a shift towards more sustainable growth in , driven by infrastructure development and a recalibration of supply, according to recent analysis. While apartment prices are expected to continue rising, the pace of increase will likely moderate, particularly in the first half of the year.
The market has experienced significant price appreciation in recent years. Over the past five years, apartment prices in the Vietnamese capital have risen by an average of approximately 26% annually, exceeding levels by more than 200%, according to Savills Vietnam.
Several factors are contributing to the expectation that price increases will slow. The implementation of the new Land Law and the land price framework are expected to increase costs for developers, including land levies, site clearance fees, and compensation payments. Simultaneously, rising costs for construction materials, labor, and financing are putting pressure on developers to pass these expenses onto buyers.
Despite an anticipated improvement in overall supply in , the majority of new projects are focused on the mid-to-high-end segments, leaving a shortage of affordable housing options. This imbalance is expected to maintain relatively high average prices across the market.
Infrastructure Investment as a Key Driver
Large-scale infrastructure projects are identified as the primary catalyst for Hanoi’s real estate market in the coming years. The launch and acceleration of new bridge construction, coupled with the completion of ring roads and new metro lines – specifically lines and – are expected to expand the urban area, improve connectivity, and increase housing supply.
The development of peripheral routes, including axes 1, 2.5, 3.5, and 4, is creating a foundation for further real estate development in the capital. These infrastructure improvements are not merely facilitating growth but are actively shaping the direction of it.
Suburban Areas Take the Spotlight
A significant trend identified by Cushman & Wakefield is a shift in housing supply towards outlying areas. Between and , Hanoi could see over 68,000 apartments and approximately 10,800 landed properties enter the market, with a concentration in suburban districts benefiting from urban expansion planning and infrastructure investment.
According to Đô Thi Thu Hang, Senior Director, Strategic Consulting at Cushman & Wakefield Vietnam, will be a pivotal year, marking a transition from cyclical growth to a more selective development phase. Suburban projects, if well-planned, legally transparent, and connected to infrastructure, are expected to lead both supply and demand.
This shift away from the city center is not considered a short-term trend but rather a structural change. Inner-city land is becoming increasingly scarce and expensive to develop, while suburban areas are attracting significant investment in transportation and urban amenities. Homebuyers are increasingly prioritizing connectivity, living environment, and planning quality over geographical distance.
Specifically, Đông Anh and western Hanoi are considered promising destinations in the short term, benefiting directly from ring roads and radial connection axes. Medium-term prospects are extending gradually towards the south of the city.
A More Equitable Supply-Demand Balance
The market’s temporary deceleration is allowing both developers and buyers to adjust their expectations. By , the supply-demand balance is expected to become more equitable, fostering sustainable growth rather than overheating. This suggests a move away from the rapid price increases seen in recent years towards a more stable and predictable market environment.
The implementation of new laws, including the Land Law, the Housing Law, and the Law on Real Estate Business, along with the new land price framework, are also expected to contribute to a more transparent and equitable investment environment. While the new land price framework may initially increase financial obligations, it is anticipated to ease bottlenecks in determining land prices for projects and improve market supply over the long term.
The Vietnamese real estate market is entering a new growth cycle, poised for a more selective and sustainable phase. The interplay of infrastructure development, regulatory changes, and a shift in supply towards suburban areas will define the market’s trajectory in the coming years.
