Recently, many mini apartments in Hanoi are being sold for tens of billions of dong, even though the rental income of this segment can be up to hundreds of millions of dong per year.
Mr. Tran Van Linh said he is selling a newly built 6-storey apartment building with 15 fully furnished rooms in My Dinh ward, Nam Tu Liem district, Hanoi.
According to Mr. Linh, although the rental income is up to 900 million VND/year, he still decided to sell at 10.5 billion VND.
The reason Mr. Linh mentioned most was the fire prevention issue. Mr. Linh frankly shared that because the design of the building was quite closed, the arrangement of the stairs had to be redesigned for the entire building, investing a large amount of money. Meanwhile, his finances were not abundant, so it was not easy to do.
He decided to stop accepting new tenants and sell the entire building at a loss.
" I bought this apartment building in 2021 for 11.5 billion VND, but now I accept to sell it for 10.5 billion VND in the hope of selling it soon to recover my capital, " said Mr. Linh.
Many mini apartment buildings for sale. (Screenshot).
Similarly, Ms. Nguyen Bich Ngoc (Cau Giay, Hanoi) also said that at the end of 2022, she and her husband bought an entire mini apartment building in Cau Giay to rent out for 20 billion VND.
Accordingly, the apartment building has about 30 apartments and is being rented out, with a monthly cash flow of about 70 - 80 million VND. However, Ms. Ngoc said that after operating the rental business for nearly a year, she decided to sell at a loss of 500 million VND because she was worried about the risk of fire and explosion that could happen at any time and she would have to take responsibility.
" The fire prevention and fighting issue in mini apartments is really not stable. In addition, it is difficult to control residents' awareness. While the apartment owners live far away, if just one resident lacks awareness, anything can happen. At that time, we will have to bear the consequences. This pressure is really great, forcing me to decide to withdraw from this market ," Ms. Ngoc confided.
Surveying many online real estate trading floors, many mini apartments are being advertised for sale in both central districts and suburban areas of Hanoi. These apartments have an area of 50 - 100 m2, 5 - 9 floors high, and are advertised for sale at prices ranging from 6 to over 10 billion VND. When offering these buildings for sale, brokers often advertise a rental profit rate of 7 - 10% per year.
For example, a 6-storey mini apartment building with 1 attic on a 60m2 land area in Cau Giay district, the owner is completing 12 rooms for rent. After the mini apartment fire in Khuong Ha, the owner decided to "cut losses" by 500 million VND compared to early 2023, the price is 14.5 billion VND.
Or a mini apartment building in Thanh Xuan with an area of 58m2 with 17 bedrooms for sale at 12.2 billion VND is introduced as having stable revenue, cash flow of more than 1 billion VND per year. Currently, the owner has reduced it to 11.5 billion VND.
A mini apartment building in Ha Dong with an area of about 120 square meters and 25 rooms has also been reduced by 700 million VND to nearly 15 billion VND.
According to many brokers, after the mini apartment fire in Khuong Ha, the selling price of mini apartments has decreased significantly. In particular, many investors of apartment buildings, due to fear of liability, are no longer interested in this form of business. They accept deep discounts to sell the entire building, avoiding the need to manage and operate and invest in fire protection systems.
Many mini apartment buildings in Hanoi do not ensure fire safety. (Illustration: Cong Hieu).
Statistics from the Vietnam Real Estate Brokers Association show that, in order to increase profits, most mini apartment owners build more floors than allowed. Many apartments do not have infrastructure investment, or the infrastructure is degraded but there is a lack of maintenance to repair and reinforce, causing insecurity for residents.
In particular, fire safety issues were of little concern to buyers in the years 2007-2010. Later, policies became clearer and awareness improved, but the situation remained largely unchanged or only improved on paper.
The consequences of fires in buildings with extra floors, incorrect density, and failure to ensure fire prevention and fighting safety are extremely serious in terms of life and property.
According to Mr. Pham Duc Toan, General Director of EZ Real Estate Investment and Development Joint Stock Company, previously building mini apartments was considered a good profitable investment channel.
Mr. Toan cited that in 2015-2016, some places in Cau Giay and Thanh Xuan still had land prices of 40-50 million VND/m2. Here, the homeowner built a 10-storey mini apartment building with an investment of 11-13 million VND/m2. With a selling price of about 18-20 million VND/m2, the homeowner could earn more than half a billion VND for an apartment over 30 m2.
However, after the fire in Khuong Ha, Mr. Toan said that in addition to legal and loan issues, the quality of apartments in mini-apartments also does not ensure fire prevention. These will be barriers that make many people consider buying mini-apartments in the near future.
“ The mini apartment market will be tightened, so investors will have to invest more money to be able to rent. As for buyers, they will also be more cautious when choosing this type of apartment ,” Mr. Toan predicted.
Chau Anh
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