Ha Noi’s property market stalls out
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Trung Hoa - Nhan Chinh apartment complex in Ha Noi. Ha Noi’s real estate market stagnated in the last few months of this year. |
Vu Thanh Hung, director of a real estate company, said he had refused to take on new projects because there was little demand.
“I think demand for property will not increase next year because of tightened monetary policies,” he said.
Hung said he had found it difficult to buy land for real estate projects because investors were waiting for prices to rise.
According to real estate agent Nguyen Phuong Linh from Phuong Dong Company Limited, even in Ha Dong District, which is the most popular part of the capital for investors, transactions had plummeted by two-thirds compared with three months ago.
However, she said that apartment prices had remained stable, at around VND17.5 to VND18 million (US$972-1,000) a square metre.
Driving up demand
According to CB Richard Ellis (CBRE), the increasing number of high-quality office buildings in My Dinh’s new urban area will drive up demand for residential accommodation over the next two years.
The western part of Ha Noi, which is becoming the capital’s new administrative area, has seen a number of new developments, such as Keangnam Ha Noi Landmark Tower, CEO Tower, Grand Plaza Tower and Da River Twin Towers.
Richard Leech, CBRE executive director, said Cau Giay and Tu Liem districts had become increasingly popular with investors.
Le Tien Duc, who owns a real estate business, said he expected property prices to fall over the next few months.
Ho Hai Minh, deputy director of the Ha Noi home real estate trading floor, also predicted that property prices would decline.
“The majority of customers cannot afford to pay the kind of high prices currently demanded,” Minh said.
Vo Tri Thanh, deputy head of the Central Institute for Economic Management, said a tightening of credit was necessary to avoid speculation and a price bubble.
Thanh said the market was currently flat because investors were waiting for stock market investment.
“The Government, in a bid to stabilise the country’s macro-economy and curb inflation, will ensure that credit remains tight,” he said.
While transactions in the city have been stagnant, a number of new real estate projects have been launched ahead of the anticipated economic recovery next year.
Just this month, 10 major estate projects were launched.
Among them is Green House residential project to build about 1,000 apartments in Viet Hung new urban area in Long Bien District.
Two big projects
Meanwhile, in South Vinh Yen new urban area in Vinh Phuc Province a residential project worth VND8.7 trillion ($483 million) was launched.
Work has also started on the $660 million Cleve apartment building complex in Van Phu new urban area in Ha Dong District and the $211 million Viglacera apartment complex in Me Tri, Tu Liem District.
At the upper end, Gia Tue Investment Joint Stock Company has begun work on the Grand Arena Hill resort, which is expected to be finished by 2012.
Dung Thanh Tam, chairman and general director of Kinh Bac Urban Development Company, said the property sector’s quiet period would give businesses time to formulate strategies for the second quarter of next year when the real estate market it expected to pick up.
Tam said it usually took between 12 months to 18 months to complete the construction of an urban area, which meant investment in real estate could not be short term.
CBRE said that around 3,000 of the 8,000 apartments for sale had been sold.
Cao Xuan Hai, head of Hi Brand, said investors should begin new projects now before material costs rose.
VietNamNet/VNS
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