While the apartment block segment has not yet seen recovery; low-cost houses are attracting speculators’ attention, which has helped to form a sudden price hike in realty in the west of Hanoi early this month.
Drawing investors’ attention
According to concerned agencies, based on the current average income of people in Hanoi, low-cost houses are considered the best solution to deal with accommodation difficulties. Over the past year, the supply of low-priced apartments has failed to meet the demand, creating the scarcity and the realty market’s attractiveness.
To meet the increasing accommodation demand, the Hanoi Construction Department has submitted to the municipal People’s Committee regulations on social house management. Accordingly, skilled young cadres and workers will be prioritised to have houses in the first stage. Besides, houses for low-income people and renters are not to be transferred and sold freely. Similarly, for social houses for rent, renters are also not allowed to transfer the renting right.
In the social house segment, low-priced houses are considered potential as they are suitable for the majority of people. Currently, in addition to people who care about the segment, other investors want to invest in it due to high profit. Both small and big investors expect to own these apartments and wait for price increase to then sell them. Some investors predict higher demand and do not hesitate to pour money into the segment.
According to a source from Savills Vietnam Ltd. Co., since early 2010, nearly 30,000 apartments have been offered for sale at prices between VND15 million and VND20 million/m2. Apartments sold at original prices have mostly been resold before investors complete the foundation construction. Work on a range of projects has also been kicked off to meet the low-income people’s demand, such as Green House in Viet Hung New Urban Area in Long Bien district or Xa La, Van Khe and Van Phu urban areas in Ha Dong district.
Big profit sources from housing projects for the low-income group have attracted attention of both local and foreign investors. At present, foreign firms are aiming at the medium-priced apartments sold at US$1,000/m2. According to market forecast reports on apartments for sale by Savills and CBRE or Coliers in Hanoi in the first quarter indicated that the demand will focus on the low-income accommodation segment in the coming time. Notably, with the participation of foreign investors, the segment is expected to be very exciting in the time to come.
“Partial fever” in many segments
Besides changes from the low-income accommodation segment, the Hanoi realty market has also seen “partial fevers” in different areas since early May. Experts said the major cause of these fevers is on-going infrastructure projects. Information such as expanding the capital city and the transport system’s development and zoning has boosted land prices in Hanoi, particularly in the west with price hikes since late 2009.
A range of projects launched has created new changes. The price hikes started with apartments of Hoang Quoc Viet Residential project under Co Nhu New Urban Area invested by Nam Cuong Group early March. Next, early April, listed prices of apartments at trading centres were raised by VND500,000-VND1 million/ m2, even VND2-VND3 million/m2. Projects such as Xa La, Van Canh and Nam An Khanh have also lured customers. Following the apartment segment, land trading also increased sharply. For instance, land prices in Nam An Khanh area rose by 20 per cent compared to VND21 -VND 22 million/m2 early this year. Land in Duong Noi climbed from VND28 million/m2 to over VND30 million/m2 in just a week. Similarly, land of the Gleximco project was at VND27 million/m2 last year. The price has now reached VND33 - VND34 million/m2. Prices of land in areas like Van Khe, Van Phu, Xa La and Van Canh have also increased by 20 – 40 per cent compared to last year.
Demand for low-income apartments is increasing; therefore, prices in the segment tend to grow by 10-15 per cent compared to one month ago. Office rentals have also grown gradually, with a 20 per cent rise in renter numbers. The number of renters at Pham Hung and Nguyen Phong Sac streets in the west of Hanoi has increased by 25% against the first quarter. The renters are mostly small companies. In generally, the Hanoi realty market remains relatively stable despite “waves”. The exciting low-income segment showed that realty is still an attractive channel for investors.
Luong Tuan
Vietnamese
