5:41:03 PM | 12/4/2007
New urban areas in Vietnam’s capital city Hanoi have recently been home to skyrocketing property prices, propelled by droves of stockholders who have hit it big in securities markets.
Prices of luxury apartments, villas and land plots for sale in many newly-urbanized areas in Hanoi have continued climbing in the past few months.
For instance, a flat on Nguyen Chi Thanh street went for only VND12 million (USUS$749) per square meter in early 2006, but the price has jumped to VND15 million (US$936.3) per sq.m. as of late last month.
Similarly, the prices of apartments in the Trung Hoa-Nhan Chinh new urban complex have increased from VND11 million in 2006 to VND14.5 million per sq.m. this year. Luxury apartments from 227 to 280 sq.m. at The Manor complex have sold like hot cakes despite their high price of US$2,000 per sq.m.
Le Phuong My Linh, director of Bitexco, the owner of The Manor, said her company sold 80 apartments in March alone. “Currently small and medium flats priced at VND2.5-5 billion (US$156,054-US$312,109) at The Manor are sold out. We now only have more than 20 luxury apartments and villas worth VND6.5 billion to nearly VND20 billion (US$405,742-1.25 million) for sale,” Linh revealed.
An official of the Hanoi Housing and Land Department’s Property Transaction Center said many real estate project investors were taking a “wait and see” attitude, hoping to sell their products at higher prices.
Land prices of residential areas in Hanoi’s new districts like Long Bien, Hoang Mai and Thanh Xuan have also increased by VND1 million to 4 million per sq.m. compared with last year.
Dang Hung Vo, former deputy minister of Natural Resources and Environment, said the skyrocketing prices of luxury apartments and villas in recent times was “abnormal”. He stressed a number of stockholders who hit the jackpot with securities deals had turned to pouring money into land plots, apartments or houses, causing speculation and sending prices skyward.
Vo said such demand would drop quickly because the new “billionaires” from stock trading were only a blip on the screen. He forecast the real estate market would stabilize within the next three to six months.
Both Vo, now a professor at Hanoi National University, and Dinh Duc Sinh of the Real Estate Traders Association, stressed the current land tax mechanism was not effective enough to prevent land and housing speculation, thus the real estate market would continue to be volatile.
The government should act to increase market supply by speeding up the progress of housing projects, particularly construction of houses for medium and low-income people.
“It needs to make more specific surveys on demands in the luxury housing market, and if necessary the Government should give permission to carry out more projects to satisfy demand and ease market pressure,” Vo said. (Young People)
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