Condos to ignite the local market

The decree will make sure less buyers get their fingers burnt

Among the big projects to be launched is An Khanh New City Development’s sale of its first phase this quarter. The mega $2 billion project is developed by South Korea’s Posco E&C and Vietnam’s Vinaconex, located in Hanoi’s Hoai Duc district, along the Thang Long Boulevard.

Scheduled for completion in 2013, the city is expected to supply 6,440 apartments, equivalent to 392,319 square metres of accommodation, enough for 30,000 people.

Even though Hoa Phat Group, the investor in a more than 1,000 apartment Mandarin Garden in Cau Giay district’s Tran Duy Hung road, refused to release its launching time, real estate experts predicted the project would be soon launched.

At the beginning of this month the CT7D, located in Le Van Luong street and invested by Nam Cuong Group and the FLC Landmark Tower of FLC Group will also be launched, with a total of 200 units and prices ranging from VND23 million ($1,200) to VND28 million ($1,470) per square metre.

In Gia Lam district, over the Red River, the second lot of Rung Co Residentials belonging to the Eco Park is also being launched, with around 1,500 apartment units.

In addition, Victoria Van Phu, Star City, Diamond Tower and Song Da City View will also add apartments to the mix.

Real estate consultant CBRE Vietnam expected that there would be 3,000 units in Hanoi launched this quarter, compared to 1,950 units in the third quarter. There were more than 4,600 units launched in the second quarter.

This decline, according to CBRE Vietnam, could be due to the Decree 71, effective on August 8, 2010 providing guidance on the Housing Law, which caps the proportion of units sold via capital contribution contracts at 20 per cent with the remaining 80 per cent sold on transaction floors.

This decree, CBRE Vietnam said, had put a pressure on developers with low financial capabilities and enhanced market transparency.

However, CBRE Vietnam executive director Richard Leech said new project launches would continue trending towards more affordable options. 

“With the opening and improvement of major infrastructure routes, the capital’s western and southern districts are attracting new residents with easier access for commuting into the core urban districts,” Leech said.

He said that the Decree 71 was expected to benefit the market by enhancing  transparency, placing pressures on developers with low financial capabilities, lessening the threat of price bubbles and limiting speculative forces.

Tran Nhu Trung, Savills Vietnam associate director, said the Decree 71 had showed off its advantages to clearly regulate five types of mobilising capital investment.  However, Trung said the procedures to implement Decree 71 were still complicated and wasted customers’ time and energy.

“The more simple it [decree] regulates, the more it is practical in the real life,” Trung said.