Small is bigger for developers
25-09-2012
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Many developers are now creating 30-70 square metre units for between VND600 million ($28,500) - VND1 billion ($47,600) to capture hesitant buyers. Started the trend from the beginning of this year, FPT City Danang introduced Vietnam’s first intelligent flat project, the FPT Smart Nano Flat in central Danang city.
According to FPT City Danang’s general director Bui Thien Canh, the flats would be built at 25sqm each, designed with full functions. “With only VND300 million (nearly $14,200), a customer can own one flat in our project. This is affordable for them,” Canh said.
Such small flats represent an opportunity to buy for people who cannot afford pricier, roomier homes. In Ho Chi Minh City, Ehome, Cheery 2 or Sunview 3 are also offering smaller units with lower prices. In Ehome, its developer Nam Long offers units from 50 to 60sqm each, with the total value of more than VND600 million ($28,500)?per two bedroom unit.
Recently, Dat Xanh Real Estate Company bought two apartment blocks in Ho Chi Minh City worth VND300 billion ($14.2 million). Then, the company offered more than 610 apartments with the unit prices starting from VND614 million ($29,000).
Meanwhile, small units are familiar in soutthern Binh Duong province, costing only VND90 million to 120 million per unit. There are now around 5,000 small units offered in Binh Duong city, of which 90 per cent is 30sqm each, while the rest is 50 to 60sqm per unit.
In Hanoi, Lai Chau Private Construction Enterprises recently sold 600 units in Dai Thanh New Urban Area with the price of VND600 million ($28,500) per unit. “We [developers] must rescue ourselves by redesigning units or we will be sunk into much more difficult,” said Nguyen Van Duc, deputy general of Dat Lanh Real Estate Company. Duc said that developers much be smarter to set up small square units, while still obeying building regulations.
According to the current Housing Law, the minimum area for a commercial apartment and social apartments are 45 and 39sqm, respectively. However, instructive documents narrow the minimum area of a social apartment to 30sqm.
Duc added that in Hanoi and Ho Chi Minh City developers should focus on 30sqm units to serve small-scale families (with four people each) in building of five or six floors without elevators.
A recent report by CapitaLand Vietnam described a large demand for housing from young couples and families who could only afford small-scale units. With the population size of young couples and families of around 2.2 million nationwide, the estimated demand for small-scale units in Hanoi and Ho Chi Minh City is around 132,000 units. This figure is larger even than the total available housing stock of 115,000 units in these two cities, according to CapitaLand Vietnam’s report.
