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Investors need to consider carefully before buying old apartments: experts

Update: May, 25/2020 - 09:07

 

Hà Nội has more than 1,500 old apartment buildings. — Photo dantri.com.vn

 
HÀ NỘI — Experts have recommended investors consider carefully before buying old apartments to ensure investment efficiency.

One of the main issues is that the time it takes to rebuild an apartment building is variable, and consequently has a large impact on payback.

After more than 10 years of implementing a plan to rebuild old apartment buildings in Hà Nội, only 20 have been renovated, accounting for just 1 per cent of the total in the capital. The city needed a lot of time to fulfill the plan, according to Hà Nội's Department of Construction.

Experts said there were also problems with reaching compensation agreements with residents of old apartment buildings, causing delays.

Đào Ngọc Nghiêm, vice chairman of the Việt Nam Urban Planning and Development Association and former director of Hà Nội's Department of Planning and Architecture, said it was difficult to ensure the interests of all parties including residents and enterprises.

In addition, there were still many problems related to the implementation of those projects, according to Nguyễn Văn Đính, deputy chairman of the Việt Nam Association of Real Estate Brokers.

Hà Nội' Department of Construction reported the city had more than 1,500 old apartment buildings, most of which were 40-50 years old located in central business districts such as Kim Liên, Trung Tự, Phương Mai, Thành Công and Giảng Võ.

The buildings had infrastructure and services in place, but had degraded over the years.

In response, the State has issued a policy to rebuild those buildings to improve living conditions for residents.

According to the Việt Nam Association of Real Estate Brokers, a number of investors are buying old apartments and waiting for opportunities to rebuild them to sell or lease for higher prices.

This has led to old apartment buildings becoming a hot segment in the domestic property market.

A 50-sq.m apartment on Hàng Vôi Street is on offer for VNĐ70 million per sq.m, while a 40-sq.m old apartment in Giảng Võ is going for 57.5 million per sq.m.

Prices fluctuate between VNĐ40 million and VNĐ60 million per sq.m for old apartment buildings in Đống Đa District, such as Trung Tự and Phương Mai.

This meant the price is the same as a new mid-end apartment in inner-city areas such as Tây Hồ, Hoàng Mai and Hà Đông, or luxury apartments on the outskirts of Hà Nội, the association said.

A property broker said the higher prices of old apartments was due to their locations near schools, hospitals, markets and shopping centres.

The price of an old apartment on Hàng Bông Street in the Old Quarter even stands at VNĐ120 million per sq.m, more expensive than luxury apartments in other areas. — VNS

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