Hanoi property market to remain overheated in 2008: experts

People standing in a queue to buy apartments in HCMC late last year

Following a year-end surge in property prices in Hanoi, analysts are bullish on the sector in 2008.

Heavy speculation in the last few weeks of last year saw land prices shooting up, even doubling in some areas compared with 2006 prices.

Le Xuan Truong of property agency BDS said prices would trend upward for “at least the next two years”.

Dang Hung Vo, former deputy minister of natural resources and environment, feared that the speculation in property this year would be much worse than in 2006.

He said money supply was increasing and going mainly into real estate.

“The high inflation rate will also see investors opt for gold and land,” he added.

The price of a square meter at the luxury apartment block The Manor in downtown Hanoi is around US$1,900-2,200, double the price that the builder sold it for last year.

Heavy buying near construction projects in residential areas in Ha Tay, Vinh Phuc, and Bac Ninh provinces saw land prices rise sharply in the last two weeks.

Analysts said besides the two percent capital gains tax on property that takes effect next year, the Ministry of Finance was not planning to slap any other tax on property transactions despite the prime minister's order.

Vo said only taxes could put an end to the speculation and restore calm in the market.