Hanoi property prices surge due to Red River

Content image - Phnom Penh Post
Land near the Red River dike in Hanoi is offered at a price of up to 50-55 million dong per sqm, nearly double from before due to the Red River urban area planning. DAN TRI/VIET NAM NEWS

Property prices in some areas of Hanoi have surged strongly after reports on draft planning for the Red River urban area were released in June.

The Red River urban planning project aims to develop an area of about 11,000ha in 13 of the Vietnamese capital’s districts – Dan Phuong, North Tu Liem, Tay Ho, Ba Dinh, Hoan Kiem, Hai Ba Trung, Hoang Mai, Thanh Tri, Thuong Tin, Me Linh, Dong Anh, Long Bien and Gia Lam.

Per the project, there will be dozens of bridges built across the Red River and many parks, and cultural, tourist, service and entertainment works, modern ecological urban areas will also be built on both sides of the river.

The plans have led to expectations that property prices in this area will increase strongly, especially after the planning is approved.

The trading of property in Cu Khoi ward in Long Bien district has increased strongly, reported the Vietnam News Agency.

According to Nguyen Quang Huy – a real estate broker – the current price is 68-70 million dong ($2,940-3,030) per sqm for a house with one frontage and 70-72 million dong per sqm for a house with two fronts, higher than the previous price of 40-50 million dong.

If this urban project is approved, the land price would increase further, even up to 80-90 million dong, Huy said.

Le Thi Minh, from Cu Khoi ward, said in the last two weeks, many people had come to ask about land in this area, causing land prices to rise. The price had increased by five-to-10 million dong per sqm to 37-40 million dong for a plot of land along Cu Khoi Street.

In some areas in Dong Anh district, land prices have also surged by about 10-12 million dong per sqm, especially in the area of Tam Xa and Xuan Canh communes overlooking the Red River urban area, to 28-30 million dong against prices from a month ago.

Land near the Red River dike is also offered a price of up to 50-55 million dong per sqm, nearly double from before due to the Red River urban area planning, a broker said.

Land price prices have also increased in Hoai Duc district, including Vuon Cam urban area, near Van Canh University, Lideco North 32, Kim Chung-Di Trach, Ha Do Charm Villas and An Lac Symphony.

Of which, the strongest increase in land price is Kim Chung-Di Trach Urban Area, where the price was only about 20-35 million dong per sqm in mid-2020 and has jumped to 40-70 million dong at present. This price is expected to surge to 55-95 million dong due to good infrastructure.

In the Me Linh district, the property price has increased to 15-30 million dong per sqm since the beginning of this year in many projects, including Cienco5, AIC, Diamond Park View, Ha Phong, Hoang Van and Melinh Vista City projects.

According to real estate experts, there are two trends for property investment on the banks of the Red River, including swing trading and buying of land for compensation or higher price in the future.

Experts believe the rising property prices are due to information about infrastructure planning and investment.

In the area along the Red River, land brokers have been accused of price manipulation to push the property price up two- or three-fold. If the planning project is approved, both landowners and brokers may continue to take this advantage to push prices upwards.

According to Vietnam Real Estate Association deputy secretary-general Nguyen Van Dinh, the increase in land prices usually depends on the level of investment in infrastructure. If there is planning in principle or drawings, an increase of about three-to-five per cent is reasonable.

If the land price is too high, it will hinder the development of the real estate market in those areas.

Ha Quang Hung, deputy director of the Housing and Real Estate Market Management Department under the Ministry of Construction, said land prices had increased by 50 per cent compared to 2019 in some places in Hoai Duc district and 20-30 per cent year-on-year in the districts of Dong Anh, Gia Lam and Long Bien.

The strong increase of real estate prices in some areas of Hanoi was mainly due to speculators taking advantage of real estate information to create price fluctuations, such as urban planning and investment policies for major infrastructure projects.

To stabilise the real estate market, the ministry this year will build a mechanism to minimise the imbalance in the product structure of the market and propose solutions to strengthen supervision of the market to reduce price manipulation.

VIET NAM NEWS/ASIA NEWS NETWORK