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Hanoi witnessing low-cost apartment fever
The Van Phu, Xa La, and Van Khe apartment projects in Ha Dong and Viet Hung districts in Hanoi have been attracting buyers, even though the prices have become 20% more expensive than the days leading up to Tet. Low cost apartments which have the sale prices of less than VND 1 billion prove to be the best seller nowadays.
Mai intended to buy an apartment in late-2008, but she then decided to delay the plan due to the overly high bank lending interest rates and the decreased real estate prices. She decided to deposit money at banks, hoping to purchase apartments later when the prices go down further.
However, Mai now regrets her decision. Experts said that the transactions of less than VND 1 billion apartments for medium income earners have increased by one third, while the prices have moved up between 10-20%. The apartments in Van Phu, Xa La, and Van Khe in Ha Dong, Viet Hung or Tu Liem districts, which have the area of 60 square metres to less than 100 square metres, are being traded at VND 15 million/sq m.
The market has been witnessing a ‘special phenomenon’ with the Xa La project’s apartments. Just six months ago, no one thought of buying apartments there, which is in the former Ha Tay province and far from Hanoi city’s centre. And they could not imagine that the apartments there are now selling like hot cakes. Just within one week in early March, the project investor sold 400 apartments.
The apartments all have the area of 60 square metres and the sale prices of around VND 600 million. The larger apartments, which are between 80-100 square metres, have the original price of VND 11.5 million/sq m, are selling more slowly, but there are no more commodities left.
Similarly, the apartments in the Van Khe urban area have the original price at VND 12 million/sq m. Meanwhile, a lot of people have to buy at VND 13.7 million or VND 14 million/sq m. The prices of Van Phu project’s apartments, which remain on paper, have also increased between VND3-4 million more, now selling at VND 12 million/sq m.
Pham Thanh Binh, Director of Phu Thai Real Estate Group, said that though the Hanoi real estate market remains quiet, there have been signs of good transactions from the segment of low cost apartments. People nowadays have planned to buy apartments for their accommodations when the market has shown signs of recovery. There are also investors among buyers, but they are just small individual investors, not speculators, who were always seen in the real estate price fever in the past.
In fact, analysts still argue if the apartments priced at less than VND 1 billion could be called ‘low cost apartments.’
Binh from Phu Thai Group said that these apartments prove to have the ‘softest’ price now available on the market, which has the sale price of less than VND 15 million per square metre. Newspapers recently mentioned the apartments under the Government’s demand stimulus packages priced at just several million VND per square metre. However, Binh said that the apartments have not been available on the market.
According to Pham Trung Ha, General Director of Hoa Phat Real Estate Company, there are three reasons which cause the price fever regarding the apartments at this moment.
First, the infrastructure of the urban areas proves to be relatively good, which are located near the operational modern urban areas. It is not too far from the urban areas to the centre of the city.
Second, the prices of the areas prove to be reasonable, which prove to be affordable for many people in the society. The prices prove to be very attractive if compared to the average price at VND 20 million/sq m of the apartments in the inner city.
Third, the commodities of this kind are still lacking. Xa La new urban area proves to be the first one in Hanoi area which has small area of apartments.
However, experts have warned that there have been signs of the virtual fever of the apartments’ prices. In general, the prices always go up when the demand increases. However, in some cases, brokers and intermediaries push the prices up to the price levels higher than the actual values.
VietNamNet, VNE
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