VietNamNet Bridge – There seems to be another Hanoi yet to be impacted by the years-long property market recession. For many observers, it is inexplicable why the old quarters of the capital city largely remain intact, with investors still hunting for prime sites, with landlords still demanding sky-high prices, and with transactions still taking place as normal though all other segments in the domestic property market have been seriously hurt by the country’s economic slowdown.

A house is seen on Tran Hung Dao Street in Hanoi. Street-front houses in downtown areas in the capital city remain expensive but attractive to investors.

High prices

Property prices in the country have tumbled over the past several years, with the segments of land lots and condos taking the hardest hit. Prices in certain cases have halved or even slashed by a greater percentage, as secondary investors take flight, cash-strapped housing developers are mired in stockpile problems, and homebuyers are hesitant to acquire properties now. But prices in Hanoi’s old quarters remain phenomenal, hovering around VND300-550 million per square meter.

A quick glimpse at some property trading websites shows prices in the old quarters remain buoyant. In Hoan Kiem District, for example, prices are by no means lower than VND300 million per square meter of street-front houses. A house on Ngo Tat To Street now is being offered at VND350 million per square meter, while that on Luong Van Can Street at some VND400 million and on Ham Long Street more than VND500 million.

To Chi Cong, director of the property trading floor Asia Real, observes that prices of street-front properties in four inner-city districts are around VND300-500 million per square meter.

“Especially, downtown areas near Hoan Kiem Lake are being offered at very high prices, with some owners demanding VND800-900 million per square meter. For example, houses are offered at VND900 million per square meter on Hang Dao Street, VND750-800 million on Hang Bo Street, and over VND700 million on Phan Boi Chau Street,” Cong says.

Property experts say despite the property slump, prices of houses in the downtown districts remain high as business-minded investors consider the quarters as favorable. In the land price frame issued by authorities for application from early this year, the highest price of land in Hanoi is VND81 million per square meter, but in reality, there are many areas where prices are ten times that level. The current price makes Hanoi’s properties among the most expensive in the world.

According to the property market researcher Colliers International, Hanoi’s land prices are comparable to prime sites in Tokyo or Paris.

Busy transactions

Despite the frozen property market and despite high prices, transactions of land and houses in the old quarters of Hanoi remain busy as street-front houses there are still appealing to investors.

A quick survey at property brokers by the Daily shows the number of transactions of such valuable properties is rising, as investors believe in the better returns when acquiring such land lots or houses.

Le Tuan Phuong at ABC Realty Center notes that after a period watching the market, many cash-rich property dealers are rushing to buy properties in the central quarters.

“The property market is still stagnant, with few transactions of over VND4 billion (less than US$200,000) recorded. However, street-front houses in downtown areas worth tens of billions of dong are still sought after by property dealers,” says Phuong.

Phuong reveals some five to ten street-front houses in downtown areas have been registered for sale each day at his center over the past few months.

A property broker at Vietland property exchange on Ma May Street in Hanoi says the exchange has received numerous registrations from home owners to sell their properties, and the exchanged successfully brokers one or two transactions each month. The broker says the number of property hunters is also on the rise, but many are still taking prudence as prices are preventively high.

Dang Van Quang, director of the property consulting firm Navigat, says that “street-front houses, especially those in downtown areas, are still very much attractive to investors.”

“Despite the dreary property market in general, investors and homebuyers still consider that segment as a high-return investment,” says Quang.    

Source: SGT