“Heat” in finished apartment segment

While high-grade apartment projects are offering discounts and other promotions to entice customers, old and affordable apartments are being hot picks in Hanoi. Prices in this segment are also climbing up continuously.

High price for affordable apartments

Although sales ads for high-grade incomplete apartment, with discounts up to 20 percent, are full on all communication channels like internet or social networks, Nguyen Anh Tuan, a director of an import – export company in Hanoi, had to spend more than one month to find out a desired one in Linh Dam urban area. The completed apartment, which costs more than VND4 billion (US$200,000), is ready for lodging as the old owner had installed basic utilities like air conditioner, kitchen cabinets, corner cabinets, wall cabinets, internet and cable TV. Tuan said, according to the agreement, a full payment was settled within one week from the date of depositing or otherwise the deal would be cancelled. The apartment was handed over after the agreed payment was made.

He said one year ago short payment was accepted easily but it is impossible for the time being. Many people are now searching for finished apartments in Linh Dam urban zone, which catches the interest of homebuyers for good infrastructure, easy traffic and high-knowledge residents. Importantly, buyers can reside immediately after agreement and payment are concluded, unlike the month-long, even year-long, waiting for high-graded accommodations.

In reality, prices of apartments here are approximate those applied to first-class apartments but they are still more preferred because they meet immediate dwelling and lie near schools, playgrounds and parks which are currently absent in high-class apartment projects, Tuan explained.

Le Quang Vuong is offering for sale a 78-square metre apartment in CT4B Building, Bac Linh Dam urban area. The flat, with a spacious sitting room, two bedrooms and a kitchen, is quoted at VND2.6 billion, or VND34 million per square metre – an equivalent to the price of a brand new apartment in Hanoi like Times City in Minh Khai ward, Hai Ba Trung district. He said, “I sold it because I needed money. My old house will continuously increase in prices in the future. Even, I could let it at nearly VND10 million (US$500) a month.”

He added that it is very easy to reach public utilities, traffic works or administrative offices from his residence. “Cars can park at the gate of the building while my children can play in spacious playground securely. Very famous schools also surround his living domicile. Infrastructure is a price factor,” he pointed out.

High prices but high preference

The demand for finished apartments not only occurs in Linh Dam urban areas but also in many parts of Hanoi. Old apartments are also searched. A broker at An Phat Real Estate Brokerage Office on Lac Long Quan Street, Tay Ho district said: Unlike previously, most visitors are now buyers. Apartments in the downtown are preferable because of good infrastructure and utilities, said Quang, a broker. If the apartments are too old to live, municipal authorities will rebuild them. As a result, high demand and price hike are understandable.

Vu Thi Thao, a tourism worker, she paid VND1.5 billion for an old apartment with a usable area of over 45 square metres (recorded on the residence book is 30 square metres). Many said she was paid too dear for this but she knew that she could not purchase a modern one with such an amount of money.

According to many market surveys, prices of old apartments are rising up. In 2010, an apartment in Linh Dam urban zones were offered at VND20 million per square metre but it is now at VND33 – 40 million per square metre. Prices of apartments in Xa La (Ha Dong district) also nearly doubled from a year ago to VND2-2.2 billion (100 square metres). Despite higher prices, deals also strongly jumped up.

According to the Ministry of Construction, condominium prices in Hanoi are already very high but they may continue going up. The demand for housing is very high in Hanoi where investors mainly use their savings to buy houses, not loans. Thus, they do not suffer pressures from lending rates like other investors in Ho Chi Minh City and other big cities, and they certainly do not surrender when prices tend to go down.

An Phat Real Estate Brokerage Office said Hanoi has a lot of apartment projects but they need some more years to complete. Thus, finished and old houses are in the vogue at the moment. – VCCI

Tags: Vietnam Property market, vietnam real estate market