Hanoi’s apartment market saw a dramatic fall in the third quarter, with sales dropping by about half. Understanding why this happened is crucial for anyone thinking about buying or investing in the city.

The total number of apartments sold fell 40 % compared with the previous quarter and 52 % compared with the same period last year, according to the latest data. At the same time, buyers are focusing more on homes they will live in rather than on flipping properties.

Mortgage rates stayed high, with floating rates reaching between 12 % and 15 % per year, making financing more expensive for owner‑occupiers. This cost pressure discouraged many potential purchasers.

More than 80 % of the new supply belonged to the high‑end and luxury segments, while mid‑range and affordable apartments were almost missing from the market. Because of this mismatch, the absorption rate dropped sharply to 38 %, the lowest level since 2024, as reported by Knight Frank.

Even though prices kept rising by 1.5 % to 2.3 % quarter‑on‑quarter, the pace of growth slowed and could not offset the weak demand. The combination of high borrowing costs, an oversupply of luxury units, and a shift toward owner‑occupiers explains the steep sales plunge.