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Apartment prices rise, people seek houses in small alleys

As apartment prices have been increasing rapidly, many people with limited financial capability want to buy small houses located in alleys.

After many years of saving money, Luu Thi Hanh in Hoang Mai district in Hanoi and her husband planned to buy an apartment in Linh Dam. However, they were told that the apartments cost VND50 million per sqm, which means more than VND3 billion for a 70 sqm apartment.

They tried to look for apartments in other areas, including Phap Van. The prices there were lower, VND35 million per sqm, but are also beyond their financial capacity.

They finally decided to buy a small house in an alley. Hanh said there are many choices for buyers who have a limited budget like her. In Hoang Mai district, for example, a house with an area of 40 sqm is sold for VND2 billion.

The only disadvantage of the affordable houses is that they are located in small alleys. However, they have many advantages. They will not have to pay monthly service fees. And the land and house prices may increase later, while apartments could see the price decrease if they are not maintained well.

“The apartment prices are very high. With a budget of VND2 billion, one can either buy an old apartment, or a small house in an alley. After some thoughts, we decided to choose the latter,” she said.

Tran Van Son from Ha Dong district said he bought a 45 sqm house and he feels satisfied with the decision. At first, he wanted an apartment, but he changed his mind because apartments are too expensive.

“An apartment in Ha Dong, which is far from the center, is priced at VND40 million per sqm. Buyers would have to spend VND300-400 million more to upgrade interior decoration,” he explained.

“So, I decided to buy a small house because I don’t want to see debt hanging over my head,” he said.

The increase in house and land demand has pushed prices up. Dao Thu Ha in Gia Lam district said she found a good house, 42 sqm, in a small alley in Long Bien. However, she did not have enough money to buy it. After borrowing money from relatives, she contacted the landlord to buy the house, but she was told that the price had increased by VND500 million.

The same is occurring with other houses. A 30 sqm house in Dong Da district has seen prices increase from VND3 billion earlier this year to VND4 billion. A 45 sqm land plot in Phu Do ward, Nam Tu Liem district, which was offered at VND55 million per sqm last year, is now priced at VND70 million.

According to Tran Van Nam, a broker, apartments are now in short supply and prices are hovering around VND40 million per sqm. This has prompted people, especially young couples, to buy houses instead. 

In fact, houses are favored by many Vietnamese because they can own both the land and the property on that land forever, unless they sell the house. Meanwhile, it is still unclear how long buyers can own apartments. 

The public was stirred up recently by the news that the Ministry of Construction is drafting a legal document which sets a cap on apartment ownership at 50-70 years.

In Cau Giay district, a five-storey house with the floor area of 40 sqm, with high-quality equipment, wooden furniture, and a red book (land use right certificate), is now offered at VND3.5 billion.  

A four-storey house in Co Nhue, 30 sqm, is offered at VND2.5 billion. Meanwhile, a house with floor area of 35 sqm in Nam Tu Liem district, near Thang Long Boulevard, is offered at VND2.35 billion.

According to brokers, houses in small alleys with a floor area of 35 sqm, priced at VND2-3 billion, sell the best because they suit the pockets of young couples.

The housing products in all market segments in Hanoi have increased by 30 percent. Even products far from Hanoi’s center have seen prices increase by tens of millions of dong per sqm. 

Ready-built house prices have also increased, which explains why the majority of people with average income have postponed their housing purchase plans.

Nguyen Thi Tuyet, a broker, said some investors buy old houses and renew them for re-sale. A 30-70 sqm house can be bought at around VND2 billion and investors just have to spend VND300-500 million more on upgrading the house to make a profit of VND300-400 million.

Duy Anh

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