Western Hanoi Attracts Property Speculators

The western Hanoi real estate market is heating up as more people, especially speculators, join in. Before this situation, Deputy Construction Minister Nguyen Tran Nam warned: “State authorities are responsible for completing legal framework, providing information for orientation and forecast and deliver guides to investors. They should not invest based on rumours. It is very dangerous.”

Speculators price real estate in this area grow day after day because several important roads like Le Van Luong will be built. However, more importantly, investors are overhasty to return to the golden time and “tycoons” are infusing the price. This makes Deputy Minister Nguyen Tran Nam to raise his voice.

 

Land prices along Le Van Luong Street, Le Trong Tan Street, National Road 32 and Ha Dong district’s centre skyrocketed.

 

According to speculators, in June, the land price in Van Khe urban zone (Ha Dong district) rose by VND5-7 million per square metre over the first quarter. Prices in other urban zones like Van Quan, Xa La and Van Canh also advanced significantly. Similarly, land prices along the National Road 32 (Nhon - Son Tay section) and Tan Tay Do urban zone also nearly doubled when the road was inaugurated in late June.

 

Apartment prices in Dong Nam urban zone and Trung Hoa - Nhan Chinh doubled and nearly trebled to VND300-400 million each from VND150 million within a short time. However, there are no statistics about successful dealings. Possibly, speculators deliberately post high prices to distort the demand.

 

According to specialists, the uptrend of prices is understandable after a long time of slump. The core reason is the wide gap between supply and demand. In Vietnam, on average, a person lives in 12 square metres while the per capita area in Hanoi is 7-8 square metres. In other countries, the per capita living area is around 30 square metres.

 

Besides, the rally of the stock market has also given a boost to real estate market. When investors find risks in the equity market, they will seek safer assets like property.

 

Mr Nguyen Viet Cuong, a famous real estate investor in Hanoi, said: “Traffic infrastructure of course impacts land and house prices but the double rise should be reconsidered. The construction of a road is known years before it is started and construction pace is reportedly regular by investors.”

 

In spite of certain doubts in the accuracy of the real estate index created by the Ministry of Construction, Mr Cuong hopes it is still a good reference as it is built on real transactions and prices. Nonetheless, the creation of this index is quite slow and has not been made public.