Multi-Million Dollar Apartments Up For Sale Despite COVID-19

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The Grand Hang Bai project in Hanoi has an offering price of 570-700 million VND per square metre. (Photo: vov.vn)

Hanoi (VNS/VNA) — Despite the pandemic impacting the resort, hotel and rental market, the housing and apartment segment still has projects for sale at record prices.

The real estate market report in the second quarter of 2021 from the Ministry of Construction showed that Hanoi and HCM City have projects in central locations at very high prices.

Accordingly, in HCM City, the One Central Saigon project has an expected selling price of about 650 – 800 million VND per square metre; while the Spirit Of Saigon project in District 1 is priced at 400 million VND per square metre.

In Hanoi, The Grand Hang Bai project (at 22-24 Hang Bai, Hai Ba Trung district) has an offering price of 570-700 million VND per square metre. An apartment measuring 120 square metre costs up to 84 billion VND (nearly 3.7 million USD).

The project also had a record price for site clearance compensation, with up to 500 million VND per square metre.

It set a new record for apartment prices in Hanoi. Earlier, the apartment renovation project at 30 Ly Thuong Kiet street had commercial apartments offered for sale at 300 million VND per square metre.

The head of a real estate firm was quoted by online newspaper vov.vn as saying that customers in the luxury segment would not be financially affected by the pandemic. Therefore, such projects have good liquidity when buyers want to transfer large amounts of money into fixed assets.

In addition to multi-million-dollar apartments, Hanoi's real estate market is also bustling with sales of houses, especially in the Old Quarter area and around Hoan Kiem Lake.

On streets like Hang Bong, Hang Bac and Dinh Liet, the number of listings increased sharply with prices of 800 million VND to 1.1 billion VND per square metre. There are houses on Hang Bong street sale at a price of nearly 1.8 billion VND per square metre.

Nguyen Van Dung, a real estate broker in Hoan Kiem district, told the newspaper that in the Old Quarter, most customers buy property to build hotels or shops for foreign tourists.

The rental price in the area could be up to 200-300 million VND a month. However, in the past two years, with four waves of the COVID-19 pandemic, the rental price has decreased by 30-50 percent, and there are still no tenants.

Due to difficulties in business, shops and hotels in the area have closed. Many people wanted to sell property to change their investments. However, the number of transactions in the area is low because it is difficult to sell large properties at this time, according to Dung.

Nguyen Van Dinh, General Secretary of the Vietnam Real Estate Brokers Association, said real estate in the Old Quarter had been popular for centuries, with convenient transport and social infrastructure as well as services. Its value therefore is immeasurable. Before the pandemic, there was very little supply in the Old Quarter.

The COVID-19 pandemic has severely affected the real estate market. If Vietnam could control the pandemic soon, the market would recover in the fourth quarter of 2021. Housing prices after the pandemic would remain stable but may not increase much due to rising input materials prices. It would be difficult for transactions because the cash flow has become exhausted after two years of the pandemic, he added.

Vo Thi Khanh Trang, deputy director of Savills Vietnam’s Research Department, said because of new supply and low inventory, transaction volume was also low in the first six months of the year. However, the selling prices of apartments, townhouses and villas tended to increase.

With the expectation that the pandemic would be controlled throughout the country in the third quarter of 2021, along with vaccination campaigns that were also being widely and quickly deployed, the market would have projects for sale in the last months of the year and the beginning of 2022.

However, the level would not be high, and might recover in a more sustainable way. Real estate prices were forecast to still increase because Vietnamese people prioritize land-based housing, she said.

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