VietNamNet Bridge – The shortage of relevant infrastructure facilities combined with the real estate slump has resulted in 60 per cent of villas and townhouses in new urban areas in Hanoi being left unfinished and unused.

 

According to the property consulting firm CBRE Vietnam, about 60 per cent of 9,500 townhouses and villas throughout Hanoi were left vacant over the last three years.

Leon Cheneval, associate director of CBRE Vietnam said that capital values of those properties would continue to fall unless amenities were added in a timely manner.

“End-buyers are still not in a hurry to make a purchase because of the wide availability of both current and future options as more and more projects are completed. Demand for houses to rent continues to grow especially among young people including students, young professionals and young couples as an alternative to buying,” said Cheneval.

CBRE Vietnam continued to advise developers that amenities, including electricity and water, schools, markets, entertainment facilities and the like, must be added or houses would never be filled.

“During the forthcoming quarters, prices are expected to still be under pressure. Going further forward, we predict that demand for houses to rent will play a more important role in the residential market,” he said.

The unused villas are worth from VND20 to 30 billion ($1 to 1.5 million) each and located in new residential areas across Hanoi.

For example, there are many vacant villas at the An Sinh My Dinh 2 condominium cluster in Tu Liem District, while the Phap Van-Tu Hiep new urban area in Hoang Mai district also has many unfinished villas.

At Van Quan new urban area in Ha Dong District, up to 50 per cent of villas and townhouses are unused.

Many villas in modern residential areas in Hanoi like My Dinh, Trung Yen, Trung Hoa and Me Tri have been deserted for nearly eight years. Many were built in 2003 and transferred to several owners, but are still deserted.

Many others in Xuan La in the west of Hanoi, Viet Hung over Chuong Duong Bridge or Quang Minh are have been unused due to not having relevant public facilities.

Many owners are waiting for the market to bounce back before selling.

Those unused villas and townhouses are wasting the money of their owners, as well as being detrimental to the society. An abandoned house is not just a big waste, but also denigrates the appearance of new urban areas, causing them to become less desireable.

The surplus of housing was caused by owners investing in villas in order to re-sell them for profit, however the current downturn of the real estate market has left them without buyers.

In many new residential areas, developers have delayed infrastructure development, which has also made the nearby properties un-sellable.

In some projects, there are even reports of conflicts between developers and residents, due to buyers being unable to move in or because of a lack of public facilities.

Mostly located in new urban areas and on the outskirt of Hanoi, necessary infrastructure systems are vital for attracting residents.

In its analysis of the real estate market in Hanoi’s first quarter of 2013, Savills Vietnam assessed the market liquidity of the adjacent segment, with villas remaining low.

Source: VIR