Hanoi infrastructure improvement: valuing up real estate

Better infrastructure systems and higher living standards of people will cause Hanoi real estate price to hike.

Many major projects

By the end of the third quarter of 2010, the Hanoi economy continued to expand steadily, with the GDP rising 10.6 % year on year, nearly doubling the country’s average growth of 6.5 %. The infrastructure of the capital city has been given a facelift after the 1,000th birthday grand anniversary. Many large-scale projects were completed and put into use, thus creating an economic growth momentum for the whole city.

Investors as well as dwellers are very interested in the progress of underway infrastructure projects of all scales. At present, Hanoi has six large ongoing projects and two completed ones.

The extended Le Van Luong Street was completed just before the celebration of the millennial birthday of Thang Long – Hanoi. Along this important road, many real estate projects have begun to be kicked off. According to experts, the infrastructure system in this area will be one of the most complete areas in Hanoi in the near future.

Lang – Hoa Lac Highway, which was renamed to Thang Long Boulevard, has just been completed, becoming the most modern urban highway in Vietnam and opening economic development momentums for western urban zones.

The underway Ngo Gia Tu Street is an artery road in the northwest of Hanoi although it is only 3 km long and 48 m wide, linking Chu Bridge and Duong Bridge.

The Dien – Nhon section on the National Road 32 – a backbone, driving route in the west of Hanoi – is rapidly upgraded and completed by contractors. Besides, a series of other projects are being deployed, including Nhat Tan Bridge linking with the Noi Bai International Airport, Nhon – Hanoi Railway Station urban rail project.

Richard Leech, Director of CBRE Vietnam, said: These projects will generate many development opportunities for their surrounding areas once completed. These projects run from the city centre outwards. Hence, the value of real estate projects along these routes will increase.

Prices keep rising

Although the real estate market is currently subdued and the number of deals has dropped steeply from the early 2010, investors and people are still very interested in areas with supporting information related to planning. For instance, when the Le Van Luong Road was completed, investors jostled to purchase good locations along this road, leading to an increase in prices, which is against the market trend. Prices of residential land and apartments surrounding the road have increased sharply from July 2010, with an increase of VND5-8 million per square metre on land and VND3-4 million on apartment.

According to data collected from real estate trading floors in Hanoi, the number of successful transactions in these areas is small because buyers are usually eventual users who need clear ownership papers while these requirements are not finalised there due to incomplete construction.

After the Thang Long Boulevard was opened to the traffic, prices of surrounding property projects start to increase, especially residential land. Land price in A Section, Le Trong Tan Road, is less than VND80 million per square metre before October but after Thang Long Boulevard was completed, the rate climbed to VND83 million. Other projects along this road like Geleximco, Nam An Khanh, An Khanh – An Thuong also saw a slight price hike.

According to CBRE, the Vietnamese property market will thrive in the coming time thanks to good supports. The enactment of the Decree 71 will make the real estate market more transparent, reduce the risk of bubbles and restrain speculative forces. Upgrading and expansion of many main roads in western and southern districts will facilitate travelling in the city, specially into the downtown. – VCCI

Tags: Hanoi infrastructure