Vietnam catches the eye of foreign investors, super rare goods are sold more and more, regulations on apartment maintenance funds

Vietnam is increasingly attractive to foreign investors, real estate prices in Hanoi's Old Quarter are skyrocketing, transactions are quiet, regulations on apartment building maintenance funds... are the latest real estate news.

In the context of the global commercial real estate market facing many challenges, Vietnam has emerged as a country with many positive policies and initiatives to improve transparency, legal compliance as well as the business environment in general. (Photo: Hoang Ha)

Price of 1m2 of land and house in Hanoi's Old Quarter is equal to the price of an apartment

According to VietNamNet , real estate on the "golden" streets of Hoan Kiem district (Hanoi) such as Dinh Tien Hoang, Cau Go, Lo Su, Hang Ngang, Hang Dao, Hang Bac, Hang Be, Hang Buom, Hang Bong, Hang Bo... are always offered for sale at quite high prices, from several hundred million VND to billions of VND per square meter, depending on the location.

There are even houses located on two “golden” streets with prices up to 2 billion VND/m2. For example, a 3-storey house on two streets Dinh Tien Hoang and Cau Go with an area of 210m2 and an 8m frontage is being sold for 420 billion VND. With this price, each m2 has a price equivalent to 2 billion VND.

Or the house with an area of 65m2, 6m frontage on Dinh Tien Hoang street is being sold for 70 billion VND; equivalent to more than 1 billion VND/m2. According to the seller, the house has a red book in the owner's name, immediate transaction.

On Lo Su Street, an 8-storey house with an area of 100m2 and an elevator is being offered for sale. The asking price is 86 billion VND, equivalent to 860 million VND/m2 and is negotiable. According to the seller, the house has a red book in the owner's name and is currently being rented out for business.

A 4-storey house on Hang Be Street with an area of 32m2 is also being sold for 25 billion VND, equivalent to about 781 million VND/m2. Or a house with an area of 250m2, a frontage of 7.5m located on Hang Bac Street is being sold for 120 billion VND, or about 480 million VND/m2.

Similarly, the house on Hang Bo Street has an area of 260 square meters, with an advertised price of 135 billion VND, or about 520 million VND/square meter. According to the advertisement, the house has one owner and one “red book”, is located in an extremely beautiful location, the most valuable on the street, with a wide sidewalk…

A representative of Batdongsan.com.vn said that on average in the past 3 months (March, April and May 2023), the selling price of street-front houses in Hanoi's Old Quarter is around 597 million VND/m2.

The number of people interested in searching for street-front houses in Hanoi’s Old Quarter has decreased by about 30% compared to the same period last year. Meanwhile, the asking price of street-front houses in Hanoi’s Old Quarter, although decreased by 11% compared to the same period last year, is still up 8% compared to the level before the Covid-19 pandemic (2019).

For example, the average data for the three months of March, April and May 2023, compared to the same period in previous years in some old streets of Hanoi, shows that the selling price of houses on Lo Su Street in 2023 was 1.058 billion VND/m2 and in 2019 it was 972 million VND/m2. Or on Hang Buom Street, the average selling price in the first 3 months of 2023 was 924 million VND/m2, while in 2019 it was 706 million VND/m2...

Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn , said that houses on Hanoi's Old Quarters mainly serve the purpose of catering, hotels, and tourism services for domestic and international visitors. Therefore, one of the signs showing the "health" of this real estate segment is the number of tourists, especially foreign visitors.

“The number of tourists has improved compared to last year but has not yet recovered to pre-Covid-19 levels. In the first quarter of 2023, Hanoi welcomed nearly 5.9 million tourists, while in the same period in 2019, this number was nearly 7.5 million.

With such a trend, I predict that in the next 3-6 months, the price level of townhouses in Hanoi's Old Quarter will remain stable and the transaction volume will hardly improve.

However, in the long term, in the next 3-5 years, when the economy returns to normal and the tourism industry develops more strongly, townhouses in Hanoi's Old Quarter are still one of the potential segments. The price level as well as transactions will grow better," Mr. Quoc Anh commented.

Vietnam real estate is being sought after by foreign investors

According to Zing , during a recent business trip to Vietnam, Mr. Matthew Bouw, CEO of the Asia-Pacific (APAC) region of Cushman & Wakefield, affirmed that Vietnam is increasingly attractive to many institutional investors around the world.

In March, the commercial real estate services firm hosted an event at its Singapore headquarters for 80 of the world’s largest institutional investors, many of them from Asia. When Cushman & Wakefield asked corporate executives about their favorite real estate investment markets, the overwhelming majority of responses were Japan, Australia, and Vietnam.

According to Mr. Matthew Bouw, institutional investors always target stable and reliable markets. In particular, in the context of the global commercial real estate market facing many challenges, Vietnam has emerged as a country with many positive policies and initiatives to improve transparency, legal compliance as well as the business environment in general.

At the same time, the investment wave of many large multinational companies such as Lego, Panasonic, Samsung, LG, Sharp... is also a positive sign, because wherever tenants go, institutional investors will follow.

Looking ahead, Mr. Matthew Bouw emphasized that investors are always looking for areas that are showing growth, such as positive economic indicators, young populations, a growing middle class and rapid urbanization.

"Vietnam has all of these attributes, plus a high GDP growth rate. All of these factors are the driving force for the development of all real estate sectors. Vietnam has the growth drivers and can become an even more attractive investment destination if it continues to make efforts to improve the business environment," said the head of Cushman & Wakefield APAC.

Behind the wave of super rare real estate for sale in Hanoi

Recently, Hanoi real estate has been buzzing with information about the sale of 5 4-storey villas on Quang An street, Tay Ho, area 1,263m2, with a total value of 660 billion VND.

In particular, the broker emphasized that this is the most beautiful lot in Quang An neighborhood, and very few people sell it. Also on Quang An street, recently, a broker posted a "super-large, high-class house, 1,270m2, priced at only 600 billion VND". To attract attention, the broker emphasized that this is an "extremely rare" real estate with a red book in the owner's name, all of it is residential land, for long-term use...

Recently, real estate products advertised for up to several hundred billion VND have appeared a lot, not only in the Old Quarter area, known as the "diamond" location in Hanoi, but also on many major streets.

Such as the 9-storey building on Ton Duc Thang street (Dong Da) with an area of 528 m2 for sale at 485 billion VND; the building on Thai Ha street (Dong Da) with an area of 1,869 m2 for sale at 518 billion VND; the house on Xa Dan street (Dong Da) with an area of 183 m2 for sale at 118 billion VND...

Surveying the prices of houses on Cau Giay Street, many houses are being offered for sale ranging from 550 - 750 million VND/m2. On Trung Kinh Street, houses are being offered for sale at prices ranging from 500 - 600 million VND/m2.

Meanwhile, on Tran Duy Hung Street, townhouses are being offered for sale at prices ranging from 500 million to over 700 million VND/m2. For example, a 200m2 townhouse with 4 floors is being offered for sale at 145 billion VND, equivalent to 725 million VND/m2. The seller said the house is being rented out at 250 million VND/month...

Not only real estate, villas in many urban areas are also being sold for several hundred billion dong.

On an online real estate listing site, a villa in the Hoang Lan subdivision of the Vinhomes Green Bay project (Nam Tu Liem) is priced at over VND650 million/m2. With an area of over 300m2, the total value of the entire villa is VND200 billion.

Surveys show that the selling price at the project has cooled down compared to last year's peak, to 600-700 million VND per square meter, but the total price of the apartments with the best views is not less than ten million USD.

Selling houses worth hundreds of billions of VND in Hanoi is not new, but it has become more common recently. The rapid price increase before has caused the townhouse and villa segment to record a stagnation and low liquidity. Many homeowners are having to sell, some places have had to lower the selling price in the hope of getting rid of the goods quickly.

However, the selling price of this segment is still very high, not suitable for the real needs of the majority of people. For example, villas located outside the 3rd ring road recorded selling prices of several hundred billion VND. This is a level that previously only appeared in central districts.

Industry insiders say that currently, bank interest rates are high, real estate speculation is no longer there, and the real demand today is for affordable, popular real estate products. In difficult economic conditions, the more hundreds of billions of dong worth of products are advertised, the more unsold they become.

According to real estate experts, highly speculative segments such as townhouses and villas are entering a strong purification process. The market at this stage is moving towards segments that meet real demand.

The real estate market is in a difficult cycle, but it is also a necessary stage to purge weak and incompetent businesses. At the same time, it requires the Government to continue to innovate its policies and institutions.

Regulations on apartment building maintenance fund

According to regulations, the apartment building management board opens a specialized account at a credit institution operating in Vietnam to manage and use the maintenance fund for the common property of the apartment building and the maintenance fund for the common property of the entire apartment building.

Currently, the implementation of the provisions of the housing law related to the apartment building maintenance fund, in Clause 6, Article 1 of Decree No. 30/2021/ND-CP dated March 26, 2021 of the Government amending and supplementing a number of articles of Decree No. 99/2015/ND-CP guiding the implementation of a number of articles of the Housing Law stipulates: "The apartment building management board is responsible for opening an account to receive maintenance funds for the common property handed over by the investor according to the Regulations on management and use of apartment buildings issued by the Ministry of Construction".

In addition, at Point a, Clause 3, Article 36 of Circular No. 02/2016/TT-BXD dated February 15, 2016 of the Minister of Construction promulgating the regulations on management and use of apartment buildings (amended and supplemented at Clause 12, Article 3 of Circular No. 28/2016/TT-BXD dated December 15, 2016) stipulates: "The apartment building management board opens a specialized account at a credit institution operating in Vietnam to manage and use the maintenance fund for the common property of the apartment building and the maintenance fund for the common property of the entire apartment building".

Regarding the apartment maintenance fund, recently, the Ministry of Construction also sent a document responding to the Management Board of Eco Green City apartment building (Hanoi) regarding the implementation of housing law regulations related to the apartment maintenance fund.

In particular, the Ministry of Construction has instructed the Management Board of Eco Green City apartment building to compare the provisions of the above law with its specific case for implementation. At the same time, please note that during the implementation process, if there are any difficulties or problems, the Management Board is requested to contact the State housing management agency in the area, the Hanoi Department of Construction, for guidance and resolution according to its authority.

Source