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Hanoi suburban real estate prices climbing daily   2010-04-05 - Dat Viet

Hanoi will have five satellite urban areas, so prices in the suburban areas have risen. Capital is flowing into the real estate sector, while it is still unclear about trends in other investment channels.



According to Dat Viet newspaper, apartment prices in new urban areas plus houses alongside Le Van Luong and Khuat Duy Tien roads are steadily increasing.


Even small speculators profit


Nguyen Vinh Quy purchased 100 square meters of land in Trung Van village in 2001 at one million dong per square meter. The price unexpectedly jumped to 40 million dong per square meter before Tet and has climbed to 45 million dong now. Quy does not intend to sell the land right now, because he believes the price will continue to climb.


According to Nguyen Anh Huong, Director of CEN Group, a real estate trading floor in Dong Da District, land prices in Van Canh and Cau Dien  are increasing daily, selling now at over 30 million dong per square meter.


Apartments in urban areas of Ha Dong district are now 34-37 million dong per square meter, rising from 30 million dong before Tet.


Dong, an An Hung Real Estate Trading Floor client, noted that, with prices rising  daily, it will be very difficult to purchase a reasonably-priced apartment.


According to Bui Tat Thang, Deputy General Director of Sacomreal, the HCM City property market is prospering again.


By the end of the first quarter of 2010, successful transactions on Sacomreal’s trading floor were worth over 600 billion dong, double that of the fourth quarter of 2009.


New apartments with reasonable prices of 20 million dong per square meter or lower have been selling very well.


Bubble yet to burst


More and more people are pouring capital into the real estate market. Even those with only 100-200 million dong in capital are joining the real estate market. They purchase land in neighboring provinces and then re-sell for profit. Those with more capital always invest in apartments.


According to Thang from CEN Group, successful transaction deals in March increased by 10 percent compared to two months ago, and by 30 percent over late 2009.  These were mostly apartments priced at 15-19 million dong per square meter.


The Deputy General Director of CEN Group noted that information about many big projects in Hanoi and the five satellite urban areas has made the real estate market heat up.


According to economist Vo Tri Thanh, now is a boom time in real estate. Capital is flowing into land after the gold trading floors shut down, plus trends on the stock market remain uncertain.


“People will think twice before investing in stocks, dollars or gold, but if they have enough money, they will purchase real estate without any thought. It is because the real estate price is increasing day by day, while they do not have to spend time to keep watch over the market performance,” Thanh explained.


However, Thanh warns that the current high prices are part of the real estate bubble and he advises investors to remain cautious in their investments.

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