Old social housing in inner city increases in price "skyrocketing"

Benefiting greatly from the traffic infrastructure system and having enough time to trade, old social housing projects in the inner city are increasing in price "skyrocketingly".

Apartments at the NHS Trung Van social housing project are being sold on the secondary market for more than 40 million VND/m2 (Photo: T.Vu)

Price increase up to 460%

On August 26, 2010, Ngo Thi Nham apartment complex (Ha Dong district) - one of the first social housing projects in Hanoi officially opened for sale. At that time, the apartments here were sold by the investor for more than 8 million VND/m2.

Up to now, after 14 years, Ngo Thi Nham apartment is being offered for sale by brokers at 45 million VND/m2, an increase of 460% compared to the starting price in 2010.

This “galloping” price increase is taking place in many social housing projects in the capital. For example, the Tay Nam Linh Dam social housing area (Hoang Mai district), at the time of handover in 2016, the price was just over 13 million VND/m2. Currently, the price of a 68 m2 apartment has reached 3.5 billion VND (51 million VND/m2).

Mr. Duong Duc Tuan, Vice Chairman of Hanoi People's Committee has just signed a decision approving the updated list of housing and urban area construction investment projects in Hanoi's housing development plans for the period 2021 - 2025 (phase 3).

Notably, information about 6 new social housing projects (about 8,300 apartments) is worth noting. However, only 2 of these projects are expected to be completed in 2026. The remaining social housing areas are all scheduled to be completed in 2028 - 2029.

Similarly, the Rice City Song Hong Project (Long Bien District) had an opening price in 2018 of about 13 million VND/m2, now soaring to 40 million VND/m2, 3 times higher after 4 years.

Another project is Rice City Linh Dam (Hoang Mai district) with a starting price of about 15 million VND/m2 in 2014. Currently, many apartments here are offered for sale at more than 50 million VND/m2.

Speaking to reporters from Dau Tu Newspaper, Associate Professor, Dr. Dinh Trong Thinh, an economic expert, said that social housing projects in the inner city benefit greatly from the transport infrastructure system. This is the key point to connect housing projects to utilities such as hospitals, schools, shopping centers, etc.

“The above potential helps social housing in the inner city to continuously increase in price. However, even when increasing, apartment prices are still only about 40 - 50 million VND/m2. Compared to current commercial apartment projects, that price is still much more 'affordable',” Mr. Thinh shared.

According to this economic expert, the scarcity of social housing supply in particular and low-cost housing in general is part of the reason why many old projects are being pushed up in price. Reports from market research units also indicate that new apartment projects priced below VND45 million/m2 are now "extinct" in the capital.

“Hanoi leaders said that this year, about 10,000 social housing units will be completed in 7 projects. However, even if this target is achieved, that number will only meet less than 20% of the housing needs of low-income workers,” Mr. Thinh analyzed.

However, in reality, not all social housing projects have achieved rapid price increases. Some projects in Hoai Duc and Quoc Oai districts, although having relatively low selling prices, only about 10 - 14 million VND/m2, have been opened for sale more than 20 times and still have not sold out. The reason is that the infrastructure connectivity in these areas is still limited.

Be careful when buying new social housing

Although not yet completed, the NHS Trung Van social housing project (Nam Tu Liem) has been widely advertised for sale by brokers on the secondary market.

Posing as a home buyer, a reporter from Dau Tu Newspaper met Mr. Tuan, a real estate broker, and learned that the apartment at NHS Trung Van is being resold at 41 million VND/m2 (the original price is 19.5 million VND/m2). Despite repeatedly telling Mr. Tuan that he is not eligible for social housing policies according to regulations, the reporter was still assured by this broker that he could buy an apartment at the project.

“You have to live in social housing for 5 years before you can transfer the red book. Now, I will buy it by notarizing the document. Don’t worry,” Tuan affirmed.

However, according to Mr. Tran Vu, Founder of the research unit SPE.R, the broker in the above case intentionally swapped concepts.

“Notarization has legal value, demonstrating the State’s protection of civil relations. A notarized document is only a document recording real events and actions directly witnessed by a bailiff. Thus, a notarized document is different from a notarized document and cannot replace a notarized document in legal relations, especially in real estate transactions,” Mr. Tran Vu emphasized.

The SPE.R expert said that because new social housing projects do not meet the required residence time, some sellers 'circumvent the law' by signing handwritten documents and making notarized documents. However, this form cannot replace a sales contract and be notarized by the State, especially when considering the legal value aspect.

In case the homeowner wants to resell the apartment before the 5-year period, only 2 subjects are allowed to buy according to regulations, including the project investor and individuals eligible to enjoy social housing policies.

“If the homeowner and buyer still deliberately conduct the purchase and sale of social housing not in accordance with regulations, the purchase and sale and transfer contract will be invalid. The buyer will be forced to hand over the social housing to the management unit. If the transaction is deliberately conducted, both the homeowner and the buyer will be administratively sanctioned,” said Mr. Tran Vu.

Source: https://baodautu.vn/batdongsan/nha-o-xa-hoi-cu-trong-noi-do-tang-gia-phi-ma-d223636.html