The Hanoi realty market did not rally in last year’s fourth quarter as usual regarding the number of products sold, heralding a dull prospect in 2012, according to CB Richard Ellis Vietnam (CBRE).

In its latest overall report released on Thursday, CBRE said that the condo supply in Hanoi in the last quarter was 4,500, an extremely modest number compared to 25,000 for the whole year’s volume. The housing supply downtrend at the year-end is attributed to the weak demand at home.

Given the current economic uncertainties, up to 45% of apartments put up for sale late last year and early this year is worth less than VND25 million per square meter. The above price excludes values of promotion and discount programs that have been widely launched by project owners in a bid to woo homebuyers.

Compared to early 2008, however, the housing price in 2011, albeit low, had risen by 76% in the low-cost housing segment, 43% in the middle segment, 20% in the high-grade segment and 5% for high-end products, noted CBRE.

The weakened financial capacity on the part of buyers hindered the realty market from recovery at the end of last year.

The property services provider quoted reports by some local banks as saying the ratio of overdue loans accounted for up to 10% of total outstanding housing loans in end-2011. Meanwhile, only 5% was recorded as overdue housing loans at the beginning of that year.

On top of that, the monetary tightening policy has discouraged home buyers from accessing bank loans.

It is predicted there will be 60 more projects with 22,000 flats to be launched into Hanoi’s market within this year. This means more pressure will be put on developers as the number of successful transactions will get lower.

Developers are forced to compete fiercely with land-lot investors, who had been mired in the falling price in the last quarter last year.

CBRE supposed the market’s recovery will depend on the economy. Meanwhile, the company said, projects owned by secondary investors will be put under higher pressure for discount prices.

The firm also estimated that at the end of this year’s first quarter there might be more transactions than late last year as prices will further slide. In other words, this year remains a challenging time for the local housing market.