Mini apartment for sale at loss after fire in Hanoi

Price decreased, some people reported stopping selling

Mr. Nguyen Xuan Dong (40 years old), a broker in Ha Dong District (Hanoi) who specializes in selling individual houses and townhouses in the inner city, said that recently, the trend of building mini apartments and then selling and renting them has flourished, and the profit from this product is good.

After the fire at the mini apartment building on Khuong Ha Street (Thanh Xuan District, Hanoi), the price of mini apartments as well as the selling price of the entire building have both decreased.

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Mr. Dong shared that each mini apartment with an area of ​​30 - 35 ^m2 has a selling price of about 700 million VND to more than 1 billion VND, depending on the location. Each mini apartment building has about 20 - 30 rooms, with monthly rental revenue of 3 - 6 million VND/apartment, rental cash flow from 100 - 150 million VND, and if sold outright, the investor can earn 16 - 30 billion VND/building, depending on the area, number of rooms, location, equipment, etc.

Because of the large profits and stable cash flow, in the past few years, many people have built mini apartments for sale and rent. Others have advertised land for sale and said it is suitable for building mini apartments. However, according to many brokers, in the past few days, after the mini apartment fire in Thanh Xuan District, the selling price of mini apartments has decreased significantly.

"I was offered 3 mini apartment buildings for sale, 2 in Thanh Xuan District and 1 in Ha Dong District. The selling price for the 2 buildings with an area of ​​about 120 - 130 ^m2 , with 25 - 28 rooms is 16 billion VND and 17 billion VND. Since the fire, no one has asked to buy for a whole week. The owner also reduced the price to 14.5 billion VND and 15 billion VND, the building in Ha Dong District has stopped selling," he said.

Mini apartments in Hanoi are often located in alleys with small, narrow entrances.

Thanh Nien 's survey of some real estate websites shows that the number of posts about mini apartments has decreased compared to the time before the fire. The posts mainly focus on selling land and are advertised as "suitable for boarding houses or mini apartments" instead of "selling out" the entire completed mini apartment building as before.

Mr. Tran Van Trong (36 years old; Thanh Xuan District, Hanoi) manages a website specializing in posting real estate classifieds, saying that ads for selling entire mini apartments have appeared a lot since the beginning of June.

"At that time, many people were looking to buy or rent a house for their children to go to college. Normally, every year, there would be a rush of postings until the end of September. But for about a week now, it has been quiet," Mr. Trong said, adding that he could not rule out the possibility of an impact from the recent tragic mini apartment fire.

Some mini-apartment investors have decided to cut losses or even stop selling. Ms. Pham Thi Nga (45 years old), owner of a mini-apartment on Ha Dinh Street (Thanh Xuan District, Hanoi), said that for nearly a month now, she has been selling this 18-room apartment building with a total area of ​​95 square ^meters for 14 billion VND, but has not been able to sell it.

"After the recent fire, I knew it wouldn't work to sell it anymore, so I told the broker to remove the ad," Ms. Nga shared.

Need to control tightly

Many experts agree that the development of mini apartments needs to be more tightly controlled. "It's not just the recent fire that needs to be controlled, this type of housing has been needed for a long time," said Nguyen Van Dinh, Chairman of the Vietnam Association of Realtors (VARS).

After the fire in Khuong Ha, many people are wary of mini apartment buildings.

The reason why mini apartments have developed well for a long time is because the demand for affordable housing in Hanoi is very high. According to Mr. Dinh, if calculated fairly, the price of mini apartments is not cheap. For example, a normal project apartment costs about 2 - 3 billion VND, while a mini apartment with the same area is about half less. However, the living environment, quality, and safety of these two types are completely different, not to mention the issue of ownership (currently, mini apartments are not granted certificates of land use rights and property - pink books).

Mr. Dinh also pointed out that many mini apartment projects do not ensure fire prevention and fighting, so in some ways, this type of project contains many big risks.

According to Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), there are many reasons for the proliferation and development of mini apartments. To thoroughly handle this issue, it is necessary to clearly stipulate that in cases where households and individuals have the need to build or renovate houses for business purposes such as for rent or for sale, they must establish a construction investment project according to regulations.

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