Prices of individual houses in many inner city districts decrease
After getting married and having 2 children, Mr. Hoang Van Binh (33 years old) wanted to sell his single-family house on Hoang Cau Street (Dong Da District, Hanoi) to buy an apartment. Mr. Binh's house is located in a deep alley, where cars cannot enter.
With a budget of less than 7 billion VND, many people choose to buy mid-range or high-end apartments instead of buying houses in alleys in Hanoi's inner city.
Mr. Binh advertised for sale a house of nearly 50 square meters for 10 billion VND, but it was difficult to sell so he reduced the price to 9 billion VND, but no one bought it.
"Although my house is in a central district of Hanoi, it is in a deep alley, so it is difficult to sell. Houses in shallow alleys that can be accessed by cars are easier to sell. The transaction price can sometimes be up to 12 - 15 billion VND for a 50 m2 house, depending on the location," Mr. Binh shared.
According to a survey by Thanh Nien , housing prices in deep alleys in inner-city districts of Hanoi tend to decrease after the Covid-19 pandemic.
Single-family houses in open spaces like Tay Ho District retain their value better than areas like Dong Da District, Thanh Xuan District...
In Cau Giay District, single-family houses with an area of about 50 - 60 m2, 5 - 6 floors high and fully furnished are being offered for sale at about 220 - 230 million VND/ m2 , about 15 - 20 million VND/ m2 cheaper than 3 - 4 months ago. Houses with the same area in Thanh Xuan District are being offered for sale at 160 - 210 million VND/ m2 , depending on location.
Meanwhile, in Dong Da District, the price of a single-family house with an area of 40 m2 or less in an alley is about 100 million VND/ m2 . Meanwhile, a house facing an alley with car access and suitable for business or rental is still priced at over 20 billion VND for an area of 60 m2 (equivalent to over 400 million VND/ m2 ). However, this price is cheaper than the time when townhouses were "feverish" before the Covid-19 epidemic.
Why the price drop?
Mr. Vu Tien Thanh (38 years old, in Cau Giay District, Hanoi), a real estate broker specializing in the inner-city market, said that the trend of young people living in apartments has caused the townhouse market to stagnate.
Apartments are the choice of many young people because of their convenience.
"In the past, to save money, people often bought houses in the city, houses in alleys or land and considered apartments as a negative asset because the price often decreases over time. But in the context of the increasingly scarce supply of apartments in inner-city districts like today and the trend of preferring to live on the same floor as an apartment, the price of this type of house is increasing, becoming an investment channel," Mr. Thanh shared.
According to Mr. Thanh, the trend of selling individual houses to buy apartments in the mid- and high-end segments has been quietly going on for about 10 years and is increasing.
However, real estate experts say that although the price of houses in the alley has decreased by about 10-20% compared to before the Covid-19 pandemic, it is still quite high compared to the affordability of people with real needs.
According to experts, real estate in the city has stable value, but apartments are more convenient to live in than individual houses in deep alleys.
Mr. Nguyen Van Dinh, Chairman of the Vietnam Association of Realtors (VARS), said that buyers often wait for the market to hit bottom before spending money, but no one knows when the bottom will be.
According to Mr. Dinh, apartments are a trend because they are convenient for family life, all activities take place on one floor, the close space helps to better connect family members. Not to mention, apartment buildings in the city are full of space, utilities, services, cars are parked in the basement... The concept of apartments as a negative asset is also gradually changing.
"Individual houses in the city are traditional products, also have high stability, but the total value is often higher than apartments. However, to own a house with open space, cars can enter the house or park at the door, the cost is very high, usually around 10 billion VND, not everyone is willing to pay. With a budget of about 7 billion VND or less, if you want to buy a single house in the city, cars cannot enter the house. This is very inconvenient in today's life. Therefore, with this budget, many people want to own an apartment rather than a house on the ground," said Mr. Dinh.
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