Hanoi 6,000 unsalable apartments

Hanoi has nearly 6,000 unsalable apartments Posted: 25 Mar 2013 11:30 PM PDT VietNamNet Bridge – Chairman of the Hanoi People’s Committee – Mr. Nguyen The Thao – says that there are nearly 6,000 apartments in the city are unsold. However, investors have not sold them to the city to convert them into houses for low-income people, houses for resettlement or houses for public employees. 20130326131820-1.jpg On March 22, hundreds of businesses joined Hanoi’s officials in a conference to seek solutions for the real estate market. The Hanoi People’s Committee’s report shows that the city currently has 5,789 apartments, more than 3,400 villas and 17.500m2 of housing floor that are unsalable. Despite that huge inventory, real estate investors have not been interested in the city’s policy on turning service houses into social houses (houses for low-income people, houses for resettlement or houses for public employees). “We have sent a notice to each firm but until now none of them has registered with the city for transformation,” Thao said. After reviewing the city’s housing development projects, Hanoi authorities have approved for converting three service housing projects into social housing projects. Six investors have registered to build social houses in seven locations in the city. Hanoi has also checked bad debts of real estate enterprises and asked commercial banks in the area to ensure credit quality, NPLs, and accurate classify debts. The construction projects in progress will be loaned. The pay of land use fees for the social housing development projects with financial difficulties will be extended up to 24 months. To solve the above inventory, Hanoi also applies the soft lending policy to low-income people, civil servants, staff of the armed forces to lease or purchase social houses of less than 70m2, with the price of under VND15 million per one square meter. In particular, the city will temporarily not consider the commercial housing projects from now to December 31, 2014. S. Tung

New draft law legalizes super-small flats | Look At Vietnam

New draft law legalizes super-small flats

April 28, 2012

LookAtVietnam – Instead of covering at least 45 square meters as
required by current regulations, apartments with a smaller size will be allowed
in the near future, an official at the Construction Ministry has said.

A 25-square-meter flat model introduced by the FPT City Da Nang JSC.  (Photo: VnEconomy)

Nguyen Trong Ninh, deputy
head of the ministry’s Housing and Property Market Management Department, made
the statement at yesterday’s forum “Real Estate in 2012: Opportunities in the
Crisis” held by the Vietnam Chamber of Commerce and Industry.
Under current regulations, a flat is allowed to be constructed if it covers at
least 45 square meters, but under a new decree being drafted by the ministry, a
much smaller area, at 25 square meters, will be allowed, Ninh said.
The bigger an apartment, the more difficult it is to be sold, according to some
surveys, he explained.
The new decree, intended for management of urban investment and development
projects, will be submitted to the Government in the second quarter of this
year for approval, he said.
The number of such super-small apartments a developer will be allowed to build
will be in proportion to the total number of apartments under its projects,
Ninh added.
He also said in 2013-2014,
the ministry will draw up the Law on Cities, and amend the laws that govern
construction, dwelling houses, and real estate business.
The proposed new regulation on small flats is in line with the viewpoint of the
Ho Chi Minh City Real Estate Association, which last month suggested developing
residential areas with small apartments of 20 to 70 square meters for singles
and small families, as one of the solutions to unfreeze the property market,
increase sales and regain consumer confidence.
Binh Duong-based Becamex
IDC has recently kicked off a project to construct 3,000 apartments of 30
square meters each, worth VND90 million (US$4,330) per unit, which is
considered a breakthrough to realize the dream of low-income people to own a
home.
VietNamNet/Tuoi Tre

High grade apartments sit empty and silent Vietnam news daily update

Owners of high grade apartments have all been lowering rental charges to lure clients. Daily, the number of vacant apartments has been increasing. A lot of investors, who purchased apartments for later resale or lease to earn a profit are now like cats on hot bricks.

Tuoi tre has reported that a lot of new apartment projects have been completed and many will be delivered to clients soon. Their sources say the market will have an oversupply, as the number of clients able to rent such apartments is limited.

Showing Tuoi tre reporters an apartment at Central Garden in HCM City, Minh, a real estate broker, remarked that he has never seen such a dramatic rental decrease. A 90 square metre apartment with two bedrooms and good furniture can now be rented for only 14 million dong per month (about $700). It was once leased at $850 per month, but the tenant left when the leasing contract ended.

Minh revealed that many other apartments in the building are also leased at rates down by $100-150 per month in comparison with one year ago.

At Saigon Pearl, an area with “five star standards”, rental rates have also dropped sharply. For example, an apartment at SG Pearl Ruby 1 with two bedrooms (84-89 square metres), plus good home comforts and interior, is now offered at $800 per month, a decrease of $150-200 from previous rates.

The list of buildings in the same predicament is growing: Cantavil An Phu in District 2, Cantavil Hoan Cau in Binh Thanh, The Everich in District 11 and Hung Vuong Plaza in District 5 all have seen the rental charges decreasing.

Even though the rents have eased, it is not easy to find tenants. H, the owner of an apartment with three bedrooms at Central Garden, has not found a renter over the last month.

According to a real estate company director, there are too many new high grade apartments put into operation recently, leading to the sharp climb in supply. Meanwhile, demand has not increased, so leasing fees have plummeted.

He pointed out that The Manor Officetel in District 1 alone provided 620 new apartments, while 300 apartments opened at The Everich I in District 11 at the end of 2009. Another source observed that 530 apartments of Sapphire building will be delivered in 2010 and there will also be thousands apartments at projects like The Vista and The Estella.

In addition to high grade apartments, projects in lower market segments like Orient Apartment or Constrexim in District 4, each of which has hundreds of apartments, have also been opened. The majority are leased with “soft” rentals.

“Though the rents have eased, they remain relatively high and unaffordable for many people who have real demand for accommodation. The number of people who are financially able to rent these apartments is really modest,” a director of a real estate firm maintained.

Potential tenants of the apartments are expats, overseas Vietnamese who return to Vietnam to do business, and some Vietnamese with high incomes.

Source: Tuoi tre

Vietnam: Serviced Apartments Survive Real-estate Market Collapse | My Sinchew

HO CHI MINH City, VIETNAM: The serviced apartments segment remains untouched by the property market's woes, with demand for rental apartments in major cities high despite the economic recession, Vietnam News Agency (VNA) reported.
A representative of Ascott International Management Vietnam said his company managed more than 800 luxury apartments in Hanoi and HCM City and most of them were occupied.
They were popular among foreigners who had been living and working in Vietnam for three to five years, he said.
Though the Government has allowed foreigners to buy houses with effect from 1 Jan, many of them are disinclined to do so, according to him.
They were used to living in places with good infrastructure and amenities, he explained, while most new houses came up in localities without those factors.
Those situated in developed areas were too expensive, he added.
Do Quan, vice chairman of the TSQ Vietnam Company, also said foreigners preferred to rent rather than buy apartments.
Few had a real need as well as the financial means to buy a house in Vietnam, he added.
Lam Van Chuc, chairman of the Phuc Duc property company, said most foreigners were not ready to pay their own cash to buy a house unlike Vietnamese.
Besides, they would only take out mortgages for houses if the interest rates were extremely low, he added.
Property consultant CBRE Vietnam said with the global economy at a low ebb, foreigners in Hanoi and HCM City would be happy to rent an apartment at 1,000-1,500 USD a month rather than sink US$200,000 into buying it. (Bernama