The price increase of apartments is still continuing, but purchasing power is slowing down as the price level continues to climb. Studio apartments in particular still maintain their price increase and good purchasing power in the Hanoi apartment market.
Studio Apartments: Prices Continue to Rise
A survey by Batdongsan.com.vn noted that, at an apartment project in Tay Mo ward (Nam Tu Liem), studio apartments in this project in 2018 had prices ranging from 800 million VND – 1.1 billion VND/apartment, but by May 2024, the price of studio apartments in this project increased to 1.6 – 1.8 billion VND/apartment. And up to now, the transaction price of studio apartments in this project has reached 2.1 – 2.2 billion VND/apartment.
Similarly, at an apartment project on Tran Duy Hung Street, studio apartments also increased in price from 2.1-2.3 billion VND/unit – the price in May 2024 to 2.7-2.9 billion VND/unit at present. Studio apartments at an apartment project in Me Tri Ward also increased by 40%, equivalent to 700-800 million VND/unit compared to half a year ago. Studio apartments on Pham Hung Street, near Keangnam building, within 6 months, the selling price of sutio apartments also increased from 2.3-2.5 billion VND/unit to 2.9-3.1 billion VND/unit. In the same time range of 6 months, a series of projects with studio apartments in districts such as Cau Giay, Tay Ho, Gia Lam… also recorded a price increase of 30-40% in the past time.
The price increase of studio apartments is part of the general price increase of the Hanoi apartment market. However, in the past month, although transactions have continued, the purchasing power of the Hanoi apartment market has slowed down compared to previous months due to the continuous increase in prices. However, in the studio apartment segment alone, purchasing power is still strong. Even in many projects, the supply still cannot meet the market demand.
Mr. Pham Van Thinh, an apartment broker in the West of Hanoi, said that because of the small area of studio apartments, when the price increases according to the market, the total cost of a studio apartment is still at the “softest level”. The cost of a studio apartment is suitable for the finances of young singles and nuclear families (a couple and a small child) – this is a group of customers with low savings, so a studio apartment becomes a suitable choice.
Studio Apartments Still Attract Investors
Because the price level of apartments has been established at a high level after many consecutive hot increases, up to now, the group of customers buying apartments are mainly people with real housing needs, investors have begun to “fall out” and look for other investment products. However, among apartment products, studio apartments still attract investors the most. Small area, small total cost, while high demand makes studio apartments not only increase in price but also have quick liquidity. In many projects, studio apartments are always in a state of “out of stock”.
Ms. Thu Thanh, an apartment broker in the West of Hanoi, said that the demand and price increase of studio apartments are much higher than other types of apartments. The demand for studio apartments is guaranteed by the increasing trend of single living and not starting a family among young people. In addition, due to the continuous increase in housing prices, studio apartments are a suitable financial choice for young couples.
According to Ms. Thanh, for the group of investment customers, studio apartments have a smaller area and lower total cost, so the price rebound is higher. Due to the large demand for studio apartments, studio apartments have the ability to quickly liquidate in both the buying and selling market and the rental market. At present, when apartment prices are stagnant, investors buy studios for the purpose of renting them out, especially developing homestay and serviced apartment models. These are two cash flow real estate models that operate quite effectively in apartment projects with studios that are centrally located or part of a complex model. They wait, when the apartment market grows again, to sell for profit after a period of renting.
