Mini-apartments offered as a fix to slow real estate market
17-09-2012
 Mini-apartments offered as a fix to slow real estate market |
Nguyen Van Duc, Deputy Director of Dat Lanh Real Estate made this proposal at a recent conference held by the Ministry of Construction.
Duc said, “The property market may be difficult through 2013, but real estate companies should not wait on assistance from the Government or banks. Banks always consider their bottom line first and the Government is shifting its focus to saving big groups in other sectors. Real estate companies will have to do for themselves."
He said that, in the current climate many companies might have to accept losses of up to 50% in order to survive, while reducing the scale of their projects.
As an example he cited a complex of 5,000 small-sized apartments in Binh Duong Province. The project, invested by Becamex IDC, was quite successful in terms of sales. Duc said this is because it met a real demand for affordable housing.
At this time, he said, many people cannot afford to buy even low-income apartments that are 70-80 square metres and many buyers have been forced to return them.
He added that the Government should launch a programme to encourage the construction of commercial homes of 25-30 square each that could house two people. If they are sold at VND12 million (USD571) per square metre, a 30-40 square metre house would cost VND300-400 million (USD14,285-19,047), which would make them within reach of many low-income people. This is also helpful to real estate investors. He said, the Government need not offer incentives in the form of financial support or tax preferences.
Sales stagnate
Nguyen Manh Ha, Head of the Department of Housing and Property Market Management under the Ministry of Construction, said Hanoi has seen a great rise in the number of apartments that do not sell, especially in suburban areas, even though prices in almost every range have decreased sharply.
"Despite the large discounts offered, most projects remain incomplete. They lack infrastructure such as schools and trade centres, making their locations undesirable,” Ha added.
Currently, around 40,000 apartments lie vacant.
In Ho Chi Minh City, roughly 20,000 apartments are still up for sale.
Economist Vu Dinh Anh estimates that, “If the price of an apartment is VND1 billion (USD47,600), the total frozen value for the two city’s unsold apartments would be around VND60 trillion (USD2.86 billion).”
Tags : house for rent in hanoi - apartments for rent in hanoi
