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The low-cost house revolution
Vietnam is now witnessing a new wave of real estate developers, both state-owned and private, turning their attention to the segment of low-cost and medium-price houses.
In Hanoi, a private real estate firm triggered the new wave, the Construction Company No 1, which is the investor of Xa La new urban area project in Ha Dong district, which includes a 25-storey building with 400 apartments.
The apartments here have the area of 50-65 sq m and the sale prices of VND11mil/sq m, or VND600-650mil/apartment.
The apartments here prove to be attractive not because of the reasonable prices, but also because of the attractive payment conditions. Clients pay in five stages, 20% of an apartments’ value each stage.
Nguyen Hong Son, Deputy Head of the Xa La Urban Area Management Board, has also revealed that the company plans to build three 34-storey buildings in April in the urban area which will be marketed two months later.
Sources say that many big real estate firms including Vinaconex, HUD and the Hanoi Construction Corporation are also hurrying to implement big-scale projects which will offer houses at medium price levels.
Nguyen Thang, Chairman of HUD, says that the company is going to implement a housing project for low and medium income earners in Thanh Lam-Dai Thinh areas in Me Linh district. “We have land, we are waiting for a feasibility study, and we hope we can kick off the project soon,” Thang said.
Meanwhile, Nguyen Truong Tien, Deputy General Director of the Hanoi Construction Corporation, said: “We will offer very low prices for apartments which you cannot imagine.”
“We plan to build low-cost, 6-21 storey apartments, which target employees and workers in enterprises. We target regular income earners, not high income earners,” Tien said.
An official from Vinaconex said that on March 17, Vinaconex submitted to the prime minister a project on building a series of houses for low and medium income earners, especially employees in Bac Phu Cat Industrial Zone on Lang-Hoa Lac Road.
The market now has every favourable condition for investors to implement projects on low-cost apartments: construction material prices have been decreasing, while investors have been encouraged to borrow money to build apartments for medium income earners.
In HCM City, Le Quoc Duy, Director General of Hoa Binh House, said that the company is going ahead with a project to build 500 low-cost apartments in Long Thoi commune in Nha Be district in HCM City with the average sale price of VND5-6mil/sq m.
Duy said that the buildings will be four or five storeys and not have lifts.
“At first, we planned to build 10-storey houses, but the expenses would have been high and we would not have had low-cost apartments. Therefore, we decided to build short apartment buildings and apply foreign technologies in the project,” he said.
“We are interested in low-cost building projects because of the high demand for these products,” Duy said.
The director of a construction company said that with the current low construction material prices, it is completely feasible to build apartments at low cost and sell at the prices Hoa Binh intends. “In this case, the investor would get the profit of 10%,” he said.
VietNamNet, TP
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