Real estate market heating up as securities fever cools

VietNamNet Bridge – As the stock market keeps falling down and bank deposits cannot bring high profit, investors are turning to inject money in real estate projects, making the market warmer.

No price fever is occurring on the real estate market; prices are just moving up gradually as the demand is expected to increase as more Viet Kieu will return home to settle down when they can enjoy visa waivers, and foreigners are allowed to buy houses for accommodation.

Saving money in… houses

House prices began escalating in March 2007. Mr Tan, the broker at the Van Quan Property Office in Ha Dong town, said that the prices of the villas in advantageous positions had seen two-fold increases, from VND3bil to VND6bil on average.

The prices of Vimeco’s apartments near Big C Supermart in Trung Hoa-Nhan Chinh new urban area have increased by VND500mil from the original prices. The owners of Vinaconex’s 34-storey apartments, who bought the apartments two years ago, are now leasing the apartments at $500-1,000.

Lam Van Chuc, Director of the HCM City-based Phuc Duc Real Estate Brokerage Company, said that buyers were queuing to buy luxury apartments on ‘beautiful land plots’ like An Phu-An Khanh, Huy Hoang and 21^st Century.

The prices of houses and land in districts 2 and 9 in HCM City changed continuously last week. The land plots on Song Hanh Road, Hanoi highway and An Phu-An Khanh residential quarter, which were offered at VND30-32mil/sq m, have jumped to VND35mil/sq m. Meanwhile, the prices of Huy Hoang apartments, which were thought to have the lowest levels, have also soared to over VND20mil/sq m from the previous levels of VND17-19mil/sq m.

Meanwhile, more than 400 buyers had to join the lucky draw to find out the ones eligible to buy 37 apartments of PN-Techcons project on Hoa Su Road in Phu Nhuan district. Those, who won the right to purchase the apartments, now can resell the apartments, gaining the profit of VND1-2mil/sq m.

Both supply and demand up

Investment in real estate market can bring stable profit, while the stock market proves to be quite ‘fragile’. That explains why many investors have returned to the real estate market, while securities investments do not bring fat profit any more.

Though the supply has improved, it cannot meet the increased demand for accommodation. Lang-Hoa Lac road in Hanoi is nearly occupied with residential quarters. Neighbouring areas of Hanoi and HCM City are also full of residential quarters. Especially, investors accept buying projects that remain on paper. Investors with long-term vision are now seeking land plots in Vinh Phuc, Ha Tay and Bac Ninh – 25 km from the centre of Hanoi.

The demand for accommodation is forecast to increase in the near future thanks to open policies. Nguyen Manh Ha, Head of the Housing Management Department under the Ministry of Construction, said that the ministry had submitted to the government a plan on allowing foreigners living and working in Vietnam to buy houses for accommodation. It is estimated that some 21,000 foreigners will be eligible to buy houses in Vietnam once the government gives the nod on the plan.

(Source: Lao dong)