Mr. Nguyen Van An, a property investor with two apartments at the Vinhomes Smart City project in Nam Tu Liem district, Hanoi, spoke happily of his somewhat unexpected success. When he bought the two properties over three years ago, they were intended as long-term rentals to generate steady cash flow. However, the recent surge in property prices has left him astounded, as his investment has nearly doubled in value. Despite the gains on offer should he sell, he will still enjoy his monthly rental income for the time being.

“I was merely hoping for steady price growth of 8-10 per cent each year, along with the rental income, which I would have considered a great success,” he continued. “But the way prices have skyrocketed recently is, honestly, beyond anything I anticipated.”

A similar tale comes from Ms. Hoang Thanh Huyen, another investor with two high-end apartments in Hanoi’s Cau Giay district. When she made her purchases at the end of 2020 and early 2021, many people questioned her decision. Back then, the price of apartments was around VND50 million ($2,000) per sq m, which seemed steep compared to the market. Today, though, it is clear that her decision was the right one. Both apartments would now sell for a significant markup, not to mention the earnings from rental income she has received to date.

Both investors shared something in common: they invested in high-end apartments and were caught pleasantly off guard by the rapid increase in value. Now, with their properties appreciating at an astounding rate, they are faced with a dilemma: should they cash out while prices are this high, or perhaps continue holding on to their valuable assets in the hope of further prices rises.

Stunning surge

Back in early 2022, the price of primary apartments hovered around VND38 million ($1,520) per sq m. Fast forward to the third quarter of 2024, and prices have more than doubled, to VND72 million ($2,880) per sq m. Put simply, in less than three years, home prices have skyrocketed to jaw-dropping levels that caught many by surprise.

The price surge in 2024 has left even the most seasoned market experts stunned. According to market research data, the year stands out as a defining time in the housing market’s history.

In the world of real estate, the numbers speak for themselves. Prices reflect far more than just a financial figure; they tell the story of supply and demand, market trends, and, of course, the growing opportunities for savvy investors.

Basically, after several years of relative calm, Hanoi’s apartment market truly captured widespread attention in 2024. Among the various segments, the high-end sector not only demonstrated impressive price growth but also proved to be resilient in the face of market fluctuations, even when the market faced challenges.

In fact, stepping into 2025, Hanoi will see no new apartments on the market priced below VND65 million ($2,600) per sq m. The majority of new supply will be in Nam Tu Liem district as well as Gia Lam and Dong Anh districts. This upcoming supply is expected to be dominated by major industry players and concentrated in well-known urban developments. Notable names include Noble Crystal Tay Ho (VND150-270 million, or $6,000-$10,800, per sq m), The Nelson Private Residences (VND130-140 million, or $5,200-$5,600), Endless Skyline West Lake (VND95-120 million, or $3,800-$4,800), The Ninety Complex (VND80-90 million, or $3,200-$3,600), The Matrix Premium (VND90-120 million, or $3,600-$4,800), and Imperia Signature Co Loa (VND87-115 million, or $3,480-$4,600).

Looking ahead at pricing trends, Mr. Tran Minh Tien, Head of Customer and Market Insight at OneHousing by One Mount Group, anticipates that apartment prices in Hanoi will continue to rise throughout 2025. The average price for primary apartments is expected to reach VND70 million ($2,800) per sq m (excluding VAT and maintenance fees), marking a 75 per cent increase compared to the first quarter of 2022.

New market cycle

In discussing the apartment market over the last few years, Ms. Nguyen Hoai An, Senior Director, Head of the Hanoi Branch at CBRE Vietnam, noted that, from 2009 to 2019, apartment prices in the capital rose by an average of 5 per cent each year, keeping pace with inflation and depreciation. Meanwhile, secondary market prices were stable, increasing by just 2 per cent a year.

Since 2022, however, apartment prices in Hanoi have surged significantly, with two key phases: late 2021 to the third quarter of 2022, and from then to present. This price surge was driven by several factors coinciding, including strong demand amid limited supply, an emphasis on premium products, and rising input costs. As in any real estate or investment market, there are always winners and losers. As experts often advise, trying to explain the market is challenging; it’s better to follow its trends.

The recent sharp rise in home prices has drawn many investors to the market, which is why newly-launched projects are seeing liquidity rates of up to 80 per cent or even 90 per cent. And, as always, when the market is at its peak, news items about the risks of investing in the apartment sector, particularly high-end units, start to surface. Nevertheless, experts have a range of unique perspectives on this.

Mr. Tien said that while the rapid increase in apartment prices in Hanoi may cause a “temporary shock” among investors, this is merely the beginning of a new growth cycle that will unfold through to 2030. Though Hanoi’s housing market is gradually seeing more supply, the actual number of units developers can offer remains limited. With the city adding over 160,000 new urban residents each year and housing supply having experienced bottlenecks for some time, home prices are expected to only continue rising.

In addition, Hanoi recently introduced a new land price list, effective from December 20, 2024 through December 31, 2025. Notably, the revised land prices are two to six-times higher than the previous table. This significant increase is one of the key factors behind the surge in housing prices, further confirming the belief that the market is entering a new growth phase where prices are expected to continue upwards.

After the initial shock, many investors are now adjusting to apartment prices approaching VND100 million ($4,000) per sq m. Additionally, the market is undergoing a cleansing process, with less capable companies fading away and leaving the market in the hands of major developers who possess extensive land banks, well-structured projects, solid finances, and professional management.

Real estate, with its large investment requirements and longer cash flow cycles compared to other investment avenues like stocks or gold, is in a market phase that is filtering out not just developers but also investors. Without foresight and determination, investors risk being excluded from the market.

According to Mr. Nguyen Van Dinh, Chairman of the Vietnam Association of Realtors (VARS), the surge in real estate prices is a direct result of the fundamental law of supply and demand. To bring prices down, the key factor to address is supply, not administrative measures.

“The market is currently split into two distinct segments: the high-end sector, catering to investors and individuals with strong financial resources, and the social housing segment,” Mr. Dinh continued. “What’s concerning, however, is the near absence of affordable housing options, which should sit between these two segments.”

Affordable housing is a pressing need for the vast majority of the population, he noted, and is the crucial missing piece in the overall market puzzle. The fact that this segment, once expected to be the most widespread, has almost disappeared is an anomaly. Policymakers need to implement clear regulations to foster the affordable segment, which is essential for the market to achieve true stability.