Ring Road 4 construction starts, will Hanoi real estate make waves?

With a total investment of more than VND 85,813 billion, 112.8km long, passing through 3 provinces and cities: Hanoi, Hung Yen, Bac Ninh, Ring Road 4 of the Capital region started construction on June 25.

Almost immediately, real estate in the area boomed.

Mr. Tran Van An, a real estate broker in Me Linh district, said that since the end of June, the number of customers interested in projects in Me Linh has increased again. Every day, Mr. An receives phone calls asking for prices and customers registering to visit the project. However, customers are only interested in projects with good legal status, reasonable prices and high discounts.

" Last weekend, I also sold two adjacent lots in Me Linh to two investors. Since the beginning of the year, the market has been almost frozen, but since the construction of Ring Road 4 started, the market has started to have transactions. Although not as vibrant as before, it has warmed up significantly, " Mr. An informed.

According to Mr. Hai, an employee of Dat Xanh Mien Bac Company, his company is currently distributing projects in Me Linh. Previously, they could only sell 1 or 2 lots per month, but within a week after the construction of Ring Road 4 began, the company sold 7-8 lots per week.

Perspective of the intersection between Ring Road 4 and radial axes. (Photo: Management Board).

In addition to the factor of Ring Road 4, Mr. Hai said that this is a project with a red book, completed infrastructure, the current price is not pushed up too high, at 30 - 40 million VND/m2, the deduction is up to 19%/year for customers who pay early, pay 10% of the product value and sign the contract immediately.

On real estate groups and social networks, information about selling land near the 4th Ring Road is constantly appearing. For example, a broker wrote: “ The golden time to double or 5x your cash flow is real. The 4th Ring Road project has officially started construction, Song Phuong – Hoai Duc land is located next to the 4th Ring Road, 2 km from Thang Long Avenue, priced from only 2 million VND/m2. 50-year garden land is waiting for land use purpose conversion. Red book transferred to the owner’s name. Contact me immediately …”.

Or: " Only over 5 million VND, close to Ring Road 4, 3 cars can pass each other comfortably. Red book in the owner's name". Or: "Need money so selling a super nice plot of land next to the Ring Road 4 project that has just started construction, square size, land expanding to the back, potential for housing or business "...

Regarding selling prices, many brokers and investors said that compared to speculative land markets in many hot spots across the country, which have decreased by 20-40%, land prices near Ring Road 4 in the capital region are having the lowest decrease, from 10-15% compared to the land fever period.

According to Batdongsan.com.vn, by June 2023, in the Me Linh area and some urban areas such as Ha Phong, Cienco 5... land prices in prime locations tend to decrease by about 15% compared to the peak, commonly fluctuating between 45-55 million VND/m2. In Ha Dong, locations benefiting from the Hanoi Ring Road 4 project such as Yen Nghia land have also decreased in price from about 63-70 million VND/m2 to a common level of 58-63 million VND/m2.

Meanwhile, in the Cu Khe area (Thanh Oai) near the traffic junction between the two ring roads Cienco 5 and ring road 4, land prices are still maintained at 55 - 60 million VND/m2, down about 10 - 12% compared to the end of 2022. Meanwhile, Binh Minh land is offered for sale at 40 million VND/m2, down about 5 - 10 times compared to the land fever period.

Notably, although land in Dan Phuong still maintains a price of 48 - 55 million VND/m2 for the location on Tan Lap street, this price has decreased 3 - 6 times compared to the middle of last year, while land on Tan Hoi street has also decreased about 5 times, to 50 million VND/m2.

Hard to 'feverish' again

According to experts, although Ring Road 4 has started construction, real estate around this area will hardly "heat up" again or have a new wave.

Responding to VTC News , Mr. Vu Cuong Quyet, General Director of Dat Xanh Mien Bac Real Estate and Services Joint Stock Company (Dat Xanh Mien Bac) said that the belt road has high connectivity not only to Hanoi but also to inter-provincial areas such as connecting with Bac Ninh, Bac Giang, Hung Yen...

Projects around Ring Road 3 are almost full, while the population is growing rapidly, the number of immigrants to Hanoi is also quite large, so the growth prospect of real estate around Ring Road 4 is very large, but it is very difficult for prices to increase sharply, it depends on infrastructure development.

" The current market context is quite quiet, real estate prices on Ring Road 4 have increased sharply in the past, the current investor psychology is to look for safe products, so it is difficult for the market to have waves at this time. In the next 2-3 years, when Ring Road 4 is completed, real estate in this area can increase and stabilize", Mr. Quyet predicted.

According to Mr. Nguyen The Diep, Vice President of Hanoi Real Estate Club, this is an opportunity for investors and large real estate enterprises. Despite the difficult real estate market, for some large enterprises with strategic vision and stable capital, this is the ideal time to develop projects around the area of Ring Road 4.

" When a few businesses join the "race", the infrastructure of that area will develop, leading to an increase in real estate prices. Along with that, other businesses will also "follow suit", pushing areas with beautiful locations around Ring Road 4 into "hot spots" for real estate in Hanoi and provinces where projects pass through ," Mr. Diep commented.

Mr. Diep also predicted that the market still has a huge demand for housing and investment, so recovery is only a matter of time, especially when the infrastructure in that area develops synchronously. In particular, the revised Land Law and the policy mechanism have many favorable points that will help the real estate prices along the 4th Ring Road increase again. It is even possible to establish a new price level in the eastern and western areas of the city.

From a more cautious perspective, Dr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, frankly stated that in order to "create waves" in the market, "drivers" often rely on good information to increase prices and create land fever. Accordingly, investors need to be extremely cautious, "read the pulse" of the market carefully, understand planning and liquidity to avoid the risk of burying capital, and at the same time need to grasp the two most basic issues. The first is the room for price increase and the second is the progress of infrastructure implementation.

“ Before deciding to “open their wallets”, investors need to evaluate the reasonableness of the current price. In particular, the two factors investors need to consider are the transaction price of the project in the past 1-2 years and the infrastructure development conditions. Next, they can compare this index with the average price fluctuation rate of the whole market to make objective assessments of the reasonableness of the current price ,” said Mr. Dinh.

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