The Savills Blog

Residential Demands to Outweigh Supply in Ha Noi

Although residential supply, which includes landed property and apartments, had a quarter-on-quarter (QoQ) increase in Q4/2021, supply levels dropped compared to the same period in 2020. According to Ha Noi’s Housing Development Plan until 2025, the city’s residential supply will fall short of the demands.

Five-year Supply Low

Savills Viet Nam’s Q4/2021 market report painted an interesting picture of the residential market in Ha Noi. For both apartments and landed property, supply levels increased quarterly but decreased year on year (YoY). For both segments of the residential market, supply levels were the lowest in five years.

For apartments, new supply in the last quarter was roughly 4,500 units. Interestingly, 80% (3,600 units) of the new supply came from the next phases of existing projects, and only 20% came from new launches. Although this represented a 42% QoQ increase, supply still dropped compared to Q4/2020. This was due to a low inventory and a limited number of new launches.

In 2021, primary apartment supply dropped by 21% YoY and reached just over 33,600 units. The trend of low supply is forecast to continue as less than 30,000 units are expected in 2022 and less than 25,000 are expected in 2023. Forecasts also expect this number to drop even further from 2024.

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Future supply of the apartment market in Ha Noi

While supply is limited across the market, there is a noticeable gap in the supply of affordable apartments. Currently, properties valued at VND 20 million/m2 are fully absorbed, and there were no new entries in the last quarter.

Villa and townhouse supply remained low too. There were no new launches in Q4/2021, and new supply of 245 dwellings came from the next phases of three existing projects. Most of the new supply came from the second phase of the Starlake project in Tay Ho District, and the remaining 35% came from Ha Dong and Dong Anh districts.

The primary supply of landed property increased 3% QoQ but decreased by -27% YoY to 1,123 dwellings. Considering Ha Noi is the capital city and has a population of over five million people, the supply of landed property is incredibly small.

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Talking about the landed property market, Mr Matthew Powell, Director of Savills Ha Noi, commented: “Primary stock of landed properties has been in short supply for a long time. However, we are looking forward to the new supply in 2022, which will predominantly be in large urban areas outside Ha Noi. We expect that where infrastructure improves, supply, sales and prices are likely to increase too.”

Future Demands Outweigh Future Supply

Over the next few years, the structure of Viet Nam’s urban population will change; this will result in a change and increase in housing demands. The country’s urban population is set to grow by 10 million people over the next decade, and the urbanisation rate will reach 44% by 2030.

By 2025, Ha Noi's population is expected to reach nine million, with the urban population accounting for about 61% of the total population. This is a significant increase compared to only 49% in 2019. This means several things for the housing market. Firstly, new trends might emerge like demands for smaller homes. Secondly, the increasing urbanisation levels mean that Ha Noi expects approximately 72,000 new urban households per year.


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This is where we start to see the fracture between demand and supply. While Ha Noi expects 72,000 new households a year, only 27,000 apartments are forecast to launch each year.

The population forecasts in the Ha Noi Housing Development Plan also show that demand will be greater than supply. For example, between 2022 and 2025, there will be a demand for 166,600 apartments. However, Savills research shows that the market only expects 78,900 new apartments in the same period.

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Ms Do Thu Hang, Senior Director of Advisory Services at Savills Ha Noi added: “In 2021, launches and sales were at a five-year low due to the prolonged lockdowns, however towards the end of the year, there were signs of increased activity. While this is a positive sign, we cannot overlook that there is a large supply imbalance, and more affordable stock is needed. This imbalance is only expected to get worse, as between 2022 and 2025, the demands for apartments will be more than double the new supply.”

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