Prices of degraded collective houses and resettlement houses are still sky-high, why?

Despite being in a dilapidated state, many resettlement houses and apartment buildings in Hanoi are still being sold at incredibly high prices.

Recently, real estate prices in some big cities such as Hanoi and Ho Chi Minh City have increased in all segments, not only new apartments but also old housing areas have recorded this phenomenon. Even many old collective apartments that have been used for decades such as: Collective area 11 Vong Duc, resettlement area Nam Trung Yen (Hanoi) have doubled, tripled in price... Many real estate experts say this is unrealistic and very "unusual".

Old, dilapidated houses are still being sold at high prices.

Apartment complex No. 11 Vong Duc (also known as the old Dien Co apartment complex), located in Hang Bai ward, Hoan Kiem district, Hanoi, is located in a location considered the most prime in the capital, only about 500 m from Hoan Kiem lake. Although it has seriously degraded after many decades since its construction in the 1960s, the prices of apartments here are always "hot".

An apartment on the first floor of the Vong Duc apartment complex with an area of ​​30 square ^meters and a frontage of 3 meters is for sale for 9.8 billion VND. (Screenshot).

Recently, on a real estate website, an apartment on the first floor of this apartment complex with an area of ​​30 ^square meters and a frontage of 3 meters was advertised for sale at a price of 9.8 billion VND, equivalent to 326.67 million VND/ ^square meter. Here, the seller introduced the house with a red book in the owner's name, the buyer can use it for business or rent it out for 25 million VND/month.

However, because it was built in the 1960s, large areas of the ceiling have peeled off, exposing iron and steel. (Photo: Dinh Quyen).

The interior of this apartment complex is always dark and damp. (Photo: Dinh Quyen).

Although it is being sold for tens of billions of VND, according to the reporter of Cong Thuong Newspaper, the space inside this apartment complex is always in a state of lack of light, dampness, and many items are seriously degraded. Large areas of the ceiling are peeling off, exposing iron and steel, tangled electrical wires that can easily cause fire and explosion, etc., posing many potential dangers to residents living in the apartment complex.

Similarly, the A6 Nam Trung Yen resettlement area, located in a prime location in Cau Giay district, is still being sold at a very high price despite being severely degraded. According to the reporter's investigation, the A6 Nam Trung Yen resettlement area (in Trung Hoa ward, Cau Giay district) consists of 4 11-storey buildings with 440 apartments, started construction in 2003 and put into use in 2010. However, in less than 15 years, the 4 buildings have been severely degraded and this situation has been going on for many years.

The Nam Trung Yen resettlement area is seriously degraded. (Photo: Tuan Nguyen).

From the outside of the building, many peeling and moldy walls can be easily observed with the naked eye, not only causing loss of urban beauty but also making residents living here feel insecure. Inside the building, the elevator area even frequently malfunctions, requiring constant repair and maintenance, making everyone here always live in fear (shared by a resident of the Nam Trung Yen resettlement area).

Sharing with reporters of Cong Thuong Newspaper, Ms. Nguyen Thi Huyen, a resident of an apartment on the 2nd floor of building A6D, said that she has had to endure a difficult life in a dilapidated house for many years. Despite many repairs, Ms. Huyen and her family still cannot feel secure living in rapidly deteriorating apartments even though they have only just been used. Not only building A6D, but the deterioration is also common in many other buildings in the same Nam Trung Yen resettlement area.

A 57.2 m² apartment in building A6D is being sold for 4.1 billion VND, equivalent to 71.68 million VND/m2. (Screenshot).

Despite the degraded infrastructure, apartments in the Nam Trung Yen resettlement area are still being offered for sale at quite high prices, ranging from about 60 - 70 million VND/m2. Typically, a 57.2 m2 apartment in building A6D is being offered for sale at 4.1 billion VND, equivalent to 71.68 million VND/ ^m2 .

Statistics from the Hanoi Department of Construction in 2023 show that the city has about 1,579 old apartment buildings (including about 1,273 houses in 7 apartment buildings and about 306 old, independent, single apartment buildings), mainly built from 1960 to 1994, concentrated in central districts. Currently, the old apartment buildings are all degraded, not meeting the needs of use and safety.

Why are house prices pushed up?

It can be seen that the recent rapid increase in real estate prices has caused people to postpone their plans to buy a house after a long time of struggling to find a place to settle down. The reason is partly due to some speculative groups and some investors inflating prices, causing confusion in market information to manipulate buyers' psychology for profit. This is also a difficult problem if not handled. In time, housing is increasingly out of reach for people, especially low-income earners.

According to Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, the reason why many old apartment buildings have become "hot" products is because they are located in "golden" locations in the center of Hanoi. In addition, the supply of new housing is scarce, so the demand for housing types is increasing, especially in inner-city districts.

However, Mr. Dinh warned buyers to pay attention to the actual area and the expansion area when buying a collective house. Because many households have expanded the "tiger cage" by tens of square meters, this can cause safety risks as well as affect the investment value for future buyers.

Many real estate experts also believe that resettlement apartments or old collective houses are often degraded. Therefore, when buying a house, buyers need to prepare finances for repairs and renovations.

"Buyers should also check whether the property is in a planned renovation or reconstruction area. No, to be able to calculate the optimal solution. At the same time, before buying a house, you should also check the fire prevention and fighting system, water supply and drainage system, etc. to avoid future risks," a real estate expert recommended.

Source: https://congthuong.vn/nha-tap-the-nha-tai-dinh-cu-xuong-cap-gia-van-cao-ngat-nguong-vi-sao-356586.html