Decaying apartment buildings are “screaming” for hundreds of millions of VND per m2
In the Thanh Cong collective area, right after the Ba Dinh District People’s Committee held a community feedback conference on the detailed planning scheme for the streamlined renovation of the Thanh Cong apartment complex including buildings: G6A, G6B, G22, G23, and G24, the prices of the apartments here continuously increased.
Based on actual surveys, a 21m2 apartment on the first floor in the Thanh Cong collective area is being offered for sale at 2.6 billion VND (equivalent to 123.81 million VND/m2), while many other apartments in the same collective area have also increased in price from 3 to 5 million VND/m2 recently.
The collective area of Thanh Cong (Ba Dinh District) has significantly deteriorated and even reached the alarming level of danger level D, but it is still being sold at inflated prices. (Photo: Lap Dong)
Currently, the prices of apartments in old collective areas, or “run-down” areas like Thanh Cong (Ba Dinh District) or Kim Lien (Dong Da District), range from 40 to 55 million VND/m2. Meanwhile, prices in other collective areas such as Trung Tu and Phuong Mai range from 40 to 60 million VND/m2.
Old collective areas in central districts such as Hoan Kiem also have high prices, ranging from 120 to 140 million VND/m2.
“I am currently advertising a collective apartment in Quan Thanh Ward (Ba Dinh District) with a ‘red book’ area of 20m2 at a price of 2.8 billion VND (equivalent to 140 million VND/m2). However, the actual area of the apartment is 70m2 due to makeshift expansion. If you buy, you can move in immediately, but since it is an old collective area, I have to forewarn that it has deteriorated. In general, the prices of old collective apartments in the Hoan Kiem or Ba Dinh area are very expensive because they are located in the city center and have many conveniences,” a broker said.
This broker is also currently offering an old collective apartment on Hang Ga Street (Hoan Kiem District) with an area of nearly 43m2 and a “red book” at a price of 2.7 billion VND (equivalent to 63 million VND/m2).
Previously, many people were excited about the information regarding a 12m2 old collective apartment on Hang Bong Street (Hoan Kiem District) being sold at a price of 7 billion VND, equivalent to 583 million VND/m2. Or a 3rd-floor apartment in an old collective area on Hang Bong Street also being sold at a price of 120 million VND/m2.
Many brokers said that recently, the market for old collective apartments has become vibrant with more buying and selling transactions, and prices have increased by 5-10% compared to the previous period. However, the fact that old deteriorating collective apartments have been “shouted out” at prices of over one hundred million VND/m2 has made many people anxious because this price is as high as that of luxurious apartments in the central city of Hanoi.
A 6-star, super VIP apartment project near Ho Guom Lake is priced from 500 – 700 million VND/m2, while old collective apartments that have deteriorated on Hang Bong Street nearby are also being sold at a price of 583 million VND/m2.
For example, the luxurious apartment project only for the top 1% of the Vietnamese upper class on Hang Bai Street (Hoan Kiem District) is priced from 500 – 700 million VND/m2; high-end apartments on Quang Trung Street (Hoan Kiem District) are priced from 60 to 100 million VND/m2; in other areas such as Lang Ha Ward (Dong Da District), the prices of high-end apartments range from 60 to 70 million VND/m2.
Be cautious when buying old collective apartments and waiting for renovation and compensation
According to the analysis of experts, the continuous efforts of the Government and Hanoi to promote the renovation, reconstruction of apartment buildings, and compensation, support, and resettlement plans have “awakened” the market for old collective apartments after many years of “dormancy”.
Mr. Dao Ngoc Nghiem, former Director of the Hanoi Department of Planning and Architecture, Vice Chairman of the Vietnam Urban Planning and Development Association, said that buyers of old collective apartments with millions of dollars consider it as a long-term investment. This is because they see opportunities for renovation and compensation.
However, this investment plan is very risky because according to Decree 69, only urgent cases such as accidents, natural disasters, fires, expiring lifespan, failure to meet normal requirements … will be renovated.
An example is that many families have chosen to buy houses in the Thanh Cong Chemical Institute collective area (Hanoi) in anticipation of renovation and high compensation. However, some people have been waiting for 15 years and the collective area has not been renovated, while the buildings are increasingly deteriorating.
Many people were “disappointed” because they bought old collective apartments in anticipation of renovation and compensation, but the collective area has not been renovated. (Photo: Van Xuan)
Therefore, if you decide to invest money, you need to consider many factors such as location, planning, expected renovation time, etc.
