Saturday, October 20, 2007

Vietnam's real estate market is heating up

Hanoi: real estate market sees new fever
16:40' 17/10/2007 (GMT+7)

VietNamNet Bridge – Hanoi’s real estate market is heating up day by day with the prices of apartments in luxury areas like Ciputra, The Manor, and Trung Hoa-Nhan Chinh up by nearly 100%.

On ACB's Real Esate Trading Floor
Mrs Hoa, who owns a villa and an apartment at Ciputra, said that she had decided not to sell the apartment at this moment as she thought the price would rise further.

The price for villas has surged to VND60mil/sq m ($3,750), while the price for apartments is VND20mil/sq m ($1,250), which represent two-fold increases over the previous levels.

Last week, Mrs Hoa sold a villa at C4 bloc for over VND60mil/sq m. Meanwhile, there are no more villas or apartments to purchase at this moment. The staffs from the marketing division for the new Ciputra’s project say “no information” in response to clients who ask about new apartments.

Apartments in new urban areas like The Manor and Garden are also being hunted by high income earners. Meanwhile, according to Nguyen Duc, Deputy Director of Bitexco, the investor of The Manor, all the apartments here have found owners.

Mr Duc said that only several special villas were left. These are villas with big surface area and super luxurious facilities, and they are being offered at special price levels of VND5-7bil/unit ($437,500).

Quynh Nhu, a resident at The Manor, said that the apartments with the area of 106-216 sq m had been selling very well. The price of these apartments has increased by 50-60% from $1,000/sq m to $1,600 /sq m. Several days ago, Mrs Nhu sold a 106 sq m (second floor, B bloc) apartment for $165,000. Meanwhile, an apartment on the sixth floor was sold last week at $180,000.

Staffs from Truong Thanh Real Estate Company say that they receive tens of calls every day from clients asking about the sale of high-grade apartments; however, the company does not have apartments to sell.

The ACB Real Estate Trading Floor in Hanoi has also reported the sharp increase of transactions. The commodities for sale are mostly private houses worth VND1-2bil ($125,000).

According to the Thang Long Real Estate Centre, the apartments in My Dinh area are being successfully traded at VND14-18mil ($1,125), while high-grade apartments are selling at $1,200-1,800/sq m.

“The prices of apartments have soared by 20%, but we do not have more apartments to sell,” said a staff from the centre, adding that a new fever was attacking the real estate market. The ‘hottest’ areas now are Thanh Xuan, Cau Giay and Tu Liem districts.

Mr Duc from Bitexco said that the state’s policy on allowing Viet Kieu to own houses in Vietnam from November 15, 2007 had stimulated the real estate market. He said that unlike previous years, when prices increased when speculators pushed the prices up, the market is now really hot due to the high demand.

Mr Duc said that the supply shortage would make the ‘price fever’ last for a long time. Meanwhile, the land price frame announced by the Hanoi People’s Committee for enterprises and individuals for reference shows the increases of between 30% and 50% in land and house prices compared to the previous year’s price frame.

According to the real estate business circle, there are three reasons behind the bustling real estate market.

First, Vietnam’s admission to the WTO has had positive impacts on the real estate market. People believe that the demand for property will increase from foreign investors.

Second, there is always a close link between the real estate market and stock market. A lot of securities investors have shifted to inject money in land and houses which they believe a better way to save their money.

Third, the legal framework for the real estate market operation has been completed, paving the way for more transparent and easier transactions. The Real Estate Law, the Property Registration Law, the Land Use Tax Law, the Housing Law, and the regulations applied for Viet Kieu have been enacted and become valid.

Analysts say that it is very likely the real estate market will boom till the end of 2007 and develop well in 2008.

(Source: Tien phong)