Black cloud sits over property ambitions

Black cloud sits over property ambitions

The property market in Hanoi’s suburbs, long mired in the economic slump, is still struggling while faint glimmers of a revival appear elsewhere.

Before 2011, land plots in Hanoi’s suburbs saw skyrocketing price. When the property market fell in difficulties the property price in many areas, particularly areas outside Hanoi’s ring road 3, which runs across seven inner city and suburban districts, took a plunge.

Although the inner-city housing segment has shown initial signs of rebound in transactions, land plots outside ring road 3, still reported low liquidity.

According to a recent study by Savills Vietnam- a leading property service provider, the villa and terraced house market in Hanoi remains in downward trend, and there were almost no transactions at scores of property projects in Hanoi suburbs

Accordingly, the price of many land plots in areas outside ring road 3 was halved compared to 2011. At some projects, the price was slashed by some 60-70 per cent but still reported no transactions.

For instance, at Nguyen Trong Tan road block A under Geleximco project (Ha Dong town, outskirts of Hanoi), terraced houses lying along the main road currently fetch VND50-55 million ($2,400-$2,650) per square metre, falling over 50 per cent compared to in peak time. For the houses not facing the main road, the price also slid by a half to around VND22-25 million ($1,060-$1,200) per square metre.

At this block, the developer is scaling up efforts to complete the outer face and is in the hand-over process.

At block C and D, though the price is around VND20 million ($960) per square metre, there are almost no transactions since only internal roads were completed.

At Kim Chung Di Trach project in Hanoi’s suburban Hoai Duc district which used to be a hotspot to property speculators, terraced houses facing project’s main road fetch around VND20 million ($960) per square metre while houses facing internal roads range from VND13-15 million ($625-$720) per square metre.

At Van Canh new urban area (also in Hoai Duc district), the price ranges from VND32-34 million ($1,540-$1,635) per square metre though the housing blocks were completed and handed over to customers for around two years.

The price of villas in diverse urban areas nearing completion in the outskirts of Hanoi also fell sharply from 30-50 per cent.

For instance, villas under North National Highway 32 urban area project of developer Tu Liem Housing JSC currently fetch VND40 million ($1,920) per square metre or those at Duong Noi project’s block A of Nam Cuong Company Limited cost a bit more than VND40 million per square metre.

One CBRE recent survey shows that over 60 per cent out of 9,000 completed housing units under survey could not find buyers.

CBRE is the world's leading commercial property and real estate services adviser.

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