Hanoi housing prices keep rising on low supply, inflation fears

Housing prices in Hanoi rose the most in five years, driven up by limited supply and the specter of inflation. According to leading property consultancy CBRE, the average price of a new apartment increased by 13 percent to US$1, 655 per square meter. In the secondary market, it was up 9 percent at $1, 278. In Vietnam, housing has historically been a safe haven investment during times of high inflation. In the quarter ending in March, new housing supply was 3, 500 units, down 39 percent quarter-on-quarter and 20 percent from the same period last year. The decline was caused by a new wave of Covid-19. Most of the new supply came from ongoing phases at six projects. Only two came into the market for the first time. Mid-priced apartments accounted for 66 percent of the new supply. Demand was higher than new supply, with 4, 200 units being sold during the quarter. CBRE forecast supply of 26, 000-28, 000 units this year, but said the affordable segment would continue to face a scarcity. While over 90 percent of the new supply would be sold thanks to the bullish market sentiments, the trajectory could change at the end of this year, depending on the economic situation. Prices are expected to keep rising in the first half of 2022 but speculative trading would come down due to a crackdown by authorities, it added.