Property
investors are increasingly leasing out properties amid a lackluster market.
Since Hanoi’s tenement market was in the
doldrums, individual investors sought to offer their properties for lease to
raise extra money on the back of a dormant property market.
Viet Hung new urban area in Hanoi’s Long Bien
district hosts scores of quality tenements for lease with ‘soft’ rental rates.
There a tenement with areas ranging from 80 to 110 square metres is charged at
6.5-7.5 million dong ($300-$350) per month. Rental rates for small units are
between 5.5-6.5 million dong ($260-$300).
In a time of low market liquidity, leasing
apartments is regarded as the best option.
Similar in area and interior furnishing
conditions tenement rental rates in Hanoi’s Thanh Xuan, Cau Giay and Tu Liem
districts are 1.5 to 2-fold more than those in Viet Hung. Initial investments
put into these properties are bigger chunks.
Current rental rates for 80sq.m-120sq.m
tenements in Trung Hoa-Nhan Chinh new urban area run between 12-15 million dong
($570-$710) per month. The rates are softer in Phung Khoang and Tran Thai Tong areas
in Cau Giay district and My Dinh area in Tu Liem district at 7-10 million dong
($330-$470) per month.
According to some property consulting firm
reports, Hanoi’s tenement rental rates would further be eased in 2012 as a
sequence of apartment projects are due to come onto the market.
In early 2012, Minister of Construction (MoC)
Trinh Dinh Dung underscored the need for restructuring the property market with
priority given to developing social housing.
Dung said the MoC had proposed the government
introduce specific policies to different social housing customer groups.
Accordingly, the state would offer incentives to building social housings and
strive to have in place resettlement house and house for lease funds to meet
increasing needs from people particularly urban dwellers.
In light of national housing development
programme to 2020 with a vision towards 2030, the MoC is determined to pull
down property prices to reasonable levels to fit the budgets of most people.
“The root of the problem is property firms
need to rearrange investment activities. In the past firms focused on serving
wealth-off people, now they should target the bulk of the population with
medium and low-end housing,” said Dung.
VIR
Business & Investment Opportunities
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