Hanoi’s housing market is drawing a buzz, a decade after the bust

The Vietnamese capital Hanoi has emerged as a favoured destination for foreign investors looking to the property market, as prices remain among the best value in Indochina, even as a gradual recovery has been underway since a disastrous slump rocked the housing market in 2007.

Kingston Lai, founder and chief executive of Asia Banker’s Club said luxury flat prices in the city have been trending upwards since 2015 but have yet to catch-up other vibrant economic hubs in Southeast Asia.

Lai cited CBRE figures showing luxury flat prices in Hanoi were up 50 per cent in the 10 year period to 2016, while mid-market flats were up 80 per cent during the same period.

“Today, quality residences in Hanoi’s city centre, on average, are sold at only around HK$1,500 (US$191.32) per square foot, half of Bangkok’s level,” said Lai. “Prices of high-quality housing will catch up with neighbouring cities amid the gradual completion of infrastructure such as railways and airport expansion, and as more foreign corporations bring investments to the market.”

Hanoi’s regional gross domestic product is expected to grow 7.3 per cent this year, fuelled in part by surging growth in manufacturing, according to the World Bank.

Foreign investment in the first two months of the year reached HK$850.2 million.

“Apple, Samsung and Microsoft have set up major plants near Hanoi, with Samsung contributing 22.7 per cent to the country’s exports in 2016,” Lai said. “Their employees are target renters for overseas investors.”