Paradox of villas and street-front house market in Hanoi

By Ngoc Hai - Oct 02, 2017 | 07:59 AM GMT+7

TheLEADERMany villas worth up to millions of dollars have been sought-after while several projects which witness prices decreased sharply have attracted little attention.

Paradox of villas and street-front house market in Hanoi
The Arden Park project by the Thanh Tri Bridge is offered for sale at the price of VND6.9 billion (roughly US$304,099) per unit.

After a long time, the supply and purchasing capacity of villas, terraced houses and street-front houses in Hanoi are on the rise again.

According to Savills, the largest property consultancy in Vietnam, there were about 1,550 villas, terraced and street-front houses entering the market in the first half of 2017 with a series of projects like Vinhomes Green Bay, Eurowindow River Park, Duong Noi new urban area and La Casta. 

The figure for second half of 2017 is expected to be 1,667 projects with some new projects being offered for sale like Park City phase 3, the Manor Central Park.

Most of the projects sold are located in prime places, complete infrastructure, convenient transportation, leading to the high selling prices. For instance, the offering price of Vinhomes Green Bay project located in front of the National Convention Center ranges from VND150 million (roughly US$6,610) to VND180 million (roughly US$7,933) per square meter.

It is estimated that each terraced house has a total value of VND5-7 billion (roughly US$220,361-308,506), and the figure for villas can reach up to tens of billion dong. Despite such high prices, liquidity remains high. For example, even though the lowest price of terraced houses and villas in the Starlake project are VND16.3 billion (roughly US$718,378) and VND21 billion (roughly US$925,518) respectively, all of 182 units of phase 1 were sold out.

According to Savills, the total volume of transactions in Q2 2017 reached 1,310 units, 126 per cent higher than Q1 2017 and 4.5 times higher than the same period last year. The transaction volume in the terraced house segment is double that of the villa segment.

According to Vu Kim Giang, the director of Hai Phat Real Estate Transaction Floor in Hanoi, Vietnamese people usually prefer terraced houses in spacious and comfortable areas to apartments in condominiums. Also, such services as transportation, education, and health in those projects have been upgraded, attracting more people to buy even at higher prices.

He said that the prices of the villa and terraced house projects which reached the bottom-line three to four years ago have been on the rise again with an average increase of 10-15 per cent per year. He believes that the land with prime locations and completing infrastructure will continue to attract customers despite higher prices.

Commercial street-front houses are the bestsellers

According to the real estate expert Nguyen Thanh Trung, the front-side commercial property segment has been the bestseller in the market for two years as it can be used for both residential and commercial purposes. Also, the prices of those houses located along the main roads or in the residential areas have increased significantly.

The offering price of the Shophouse 24h project on To Huu Street was VND74.6 million (roughly US$3,287.8) per square meter. Currently, the price on the secondary market has doubled.

Trung said that the investors soon buying commercial street-front houses in the CT2 Urban area - Exchange city can now earn VND2-3 billion (roughly US$88,144.5-132,216.8) per unit as the construction of the main roads in the front and the back of the block was finished.

He said that the price of this project might continue increasing as there are additional 2,700 houses which are under construction nearby, which means that the demand for shopping and entertaining would be very high in the future.

Almost investors value commercial street-front houses at higher prices than terraced houses and villas. Some investors even launched the million US dollar houses. 40 five-story Marina Arc street-front houses in the Aqua Bay subdivision of Ecopark Hanoi urban area is offered for sale at the price of VND20 billion (roughly US$881,445.6) per unit. Nguyen Dung Minh, Deputy General Director Vihajico, the investor of Ecopark Hanoi Urban Area, said that this block located by the lake is the entertainment center for the residents of 1,000 villas and terraced houses as well as other 5,000 units which are under construction.

Still facing the sales slump

The North 32 National Road urban area is empty due to the lack of utilities.

However, not every villa, terraced or street-front houses project can be sold. Despite the very low prices, some projects running along Thang Long Boulevard and National Road No. 32 almost have no liquidity. This is because many projects are constructed incompletely as well as there is no utility in the area, rarely attracting customers.

Besides, Trung said that some projects equipped with a wide range of utilities still witness the sales slump due to their unaffordable prices. For example, a project located on Vu Ngoc Phan street having only 25 villas and terraced houses cannot be sold as their offering price is VND230-300 million (roughly US$10,136.6-13,221.7) per square meter.