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Property market hot in northern Hanoi   2010-08-03 - Dan tri

While land prices in areas considered the “hottest” in Hanoi have declined, prices of land in “newly emerging” areas like Me Linh and Dong Anh have been climbing.  

After the Ba Vi land price fever cooled, Hanoi’s real estate market has become gloomy. Areas once considered the “hottest areas” in the last two years, like Lang Hoa Lac Road, the Highway No. 32 and Le Van Luong Road, have all seen real estate prices decreasing.


Land at Nam An Khanh project is now offered at 26-28 million dong/square metre, a decrease of two million dong over April 2010. Land along Le Trong Tan Road now sells at 30-33 million dong/square metre.


Phong, an investor offering to sell land on Le Trong Tan Road at 33 million dong per square metre, complained that she will lose two million dong/square metre, because she purchased the land at 35 million dong. Meanwhile, land along Highway No. 32 is now 26-28 million dong/square metre, down by 2-4 million dong.


Apartment prices in these areas have also decreased slightly, now selling at 14-16 million dong/square metre.


The price drops are considered sharp falls if compared with gold price fluctuations. The gold price is now at over 28 million dong per tael, increasing by 12 percent over the beginning of the year (25 million dong per tael).


When asked why prices of land and apartments, considered “high quality products” because they are not located far from the city centre, have become less attractive, real estate trading floor consultants responded that investors cannot see high opportunities here.


Land has become too expensive if compared with market prices. To have a land plot in these areas, one needs 3.5-5.5 billion dong, a very big sum of money.


“While you must have a big sum of money for investment, you cannot expect high profits, because land prices here are overly high already, and they are not likely to increase further,” Khanh, 36, a real estate investor, explained.


Investors are also worried about liquidity, because it is not easy to find people with enough money to buy the expensive products.


While land prices in some areas of Hanoi have cooled, prices are rising in other areas, like Me Linh and Dong Anh districts.


Khanh noted that recently the number of transactions in these districts has risen rapidly and he reaped fat profits from investment deals in these locations.


In Dong Anh district, people believe that land prices will rise quickly from current levels of 23-25 million dong/square metre when Nhat Tan Bridge is opened. Meanwhile, in Me Linh District, the implementation of a series of projects has made people believe that the area will develop fast.


Real estate brokers observed that these land investment deals will not bring fat profits as in other areas, but the profits will be big enough to satisfy investors with low investment capital. With just one billion dong, they can purchase products available at Cienco 5, AIC, and Minh Giang Dam Va projects in Me Linh.

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