Low- Priced Housing: More Delay for Payment

 

After a period of slowdown, the property market started to warm up in early 2010 as investments in low-priced houses have been growing. Many people feared that house prices would jump in the future while, according to experts, one cause was the forecast of growing capital from closed margin gold trading exchanges from end-March.

 

Recently, real estate transactions at property brokerage offices in the capital city Hanoi are very active, especially in Van Khe and Van Phu areas (Ha Dong district, Hanoi). At present, prices semidetached residential land plots in Van Khe range from VND43 million to VND61 million per sq.m, depending on area and location. Apartments in Phu Loi are offered at VND11.6 to VND12.5 million per sq.m and apartments in Belleza are sold at VND17-18 million per sq.m. The high-rise 500-apartment Victoria Van Phu condo project in Ha Dong district, invested by Van Phu Urban Development Investment Company, is selling its 95-117 sq.m apartments at VND16 million per sq.m but the market price for this flat climbs to VND20.5 million per sq.m. Real estate transaction offices in Hanoi are full of people searching for new deals. The number of property contracts is also soaring, up some 40 % compared with late 2009 and early 2010.

 

Commenting on property market trends in 2010, Mr Pham Thanh Hung, Deputy General Director of Century Real Estate Group said that in 2010 the northern and southern markets will be very different. While the southern market is still in the “hibernation” stage and real estate investors are quite concerned about the trend, the northern market, particularly Hanoi, is expected to experience a new wave. Hanoi has had a wave of new projects and investors introducing new products with very reasonable market-based price adjustments as well as selling and fundraising methods. Hence, many projects in Hanoi have sold very well over the past 2-3 months.

 

According to Mr Hung, 2010 will see a rise in the low-cost housing segment for average and relatively low incomers. Specifically, buyers are expected to focus on land plots with prices ranging from less than VND15 million per sq.m to VND30 million, not high-rise apartments or modern urban areas. However, how to distribute low-priced houses to the appropriate persons is a concern for society. Who is granted the rights to deliver low-priced houses is now a big question as low-priced housing funds are created by the Government’s preferential policies for individual investors.

 

Mr Nguyen Thai Son, Director of Xa La Urban Zone Project Management Board, Ha Dong district, said: In 2009, the housing market was adversely affected by the economic crisis and soaring prices of input materials. To stabilise the market, in 2010, a large majority of investors focus on low-cost houses. At the same time, this creates the best conditions for people to find affordable houses. Mr Son said, when the property market heats up, investors may require buyers to pay in advance 50 % of house value. However, at present, they do not apply this rate but only 5-10 % in the first tranche, and another 15-20 % after three or six months. Instead of paying in two or three transfers, the payment is divided into smaller segments.