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Highrise building ban casts pall over apartment market
Sales of older high-rise apartments remain sluggish in Ha Noi, with buyers shopping carefully to avoid possible losses in the face of an outstanding Government decision issued in 2007 to require all older apartment blocks in the capital city to be rebuilt.
Since then, the prices of older apartment units in four districts, including Hai Ba Trung, Dong Da, Ba Dinh and Cau Giay, have increased sharply, to an average of VND20-40 million (US$1,050-2,100) per square metre, according to Northern Green Land Real Estate and Services Company.
Older units on Nguyen Cong Tru Street, one of the city's hottest addresses, were averaging as high as VND60 million ($3,160) per square metre.
However, prices receded in the face of a Government decision last December to ban high-rise construction, a move which aimed to protect architectural values and social and technical infrastructure in a part of the city that is home to many historically and culturally significant buildings.
The ban temporarily halted 223 ongoing high-rise construction projects in the four central districts of Hoan Kiem, Hai Ba Trung, Ba Dinh and Dong Da.
While the ban was lifted in July this year, construction continues to be barred in the Ba Dinh political centre, Old Quarter and Ho Guom Lake, Old Citadel and Army areas.
And the lasting effect of the ban has been a chilling effect on the market for older units, with many real estate brokerages suffering the consquences.
BDS Real Estate Company Director Le Xuan Truong was still advising clients and investors to be very careful when considering this market.
It would be difficult to see this market reviving since it was under a constant threat of new Government regulation, agreed Hoa Phat Land Company General Director Pham Trung Ha. The city would continue to control closely older units while tightly regulating new construction, he said.
Once new construction commenced to replace more of the older buildings, more delays would occur as current owners and new builders negotiated compensation, Ha added.
"If the projects are located in licensed areas and the investors have pledged to implement the projects as scheduled, these projects could still be highly profitable market," said Ha.
vietnamnews
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