According to Savills Vietnam, Hanoi’s retail real estate market is showing signs of recovery and will be more active as retailers go about the task of finding new premises. Supply in the first quarter rose 1 per cent quarter-on-quarter. Ground floor rents increased 5 per cent quarter-on-quarter and 4 per cent year-on-year. The fastest growth was seen in the central and eastern areas of the capital, with an average annual increase of 5 per cent.

The office market has been seeing high demand. Office supply in Hanoi in the first quarter posted slight growth, led by Grade B projects. Urban districts are supplying many products to the market, followed by residential areas in west Hanoi, especially Cau Giay district.

For villas / townhouses, compared to the fourth quarter of 2021, the situation has improved, with the market recording growth in new supply that was evenly distributed throughout the capital. Transaction volumes rose quarter-on-quarter but were still lower than in the same period last year.

Selling prices have set new records since the third quarter of 2021, especially from increases in villas / townhouses. It is forecast that over the remainder of the year more than 1,600 units from ten projects will be distributed. With limited products in the capital, investors will continue to seek opportunities in neighboring areas such as Bac Ninh, Bac Giang, Hung Yen, and Hoa Binh provinces.

The apartment market for sale remained limited in the first quarter but is predicted to recover in the second quarter. There were no new projects in the first quarter, with supply coming from six existing projects.

Rents have continued to increase since the first quarter of 2019, in which Grade B projects led in terms of primary price growth, followed by Grade C and Grade A. This has caused the market to incur a shortage of low-cost apartments.

“After a quiet quarter, Hanoi’s apartment market is expected to recover quickly,” the Senior Director of the Consulting and Research Department at Savills Hanoi said. “Improved infrastructure outside of the city center will contribute to promoting real estate development.”