Many houses in urban area projects in the western side of Hà Nội have been abandoned.. Photo kinhtedothi.vn

HÀ NỘI – Hundreds of villas and houses worth millions of US dollars in urban residential projects on the west side of Hà Nội have been abandoned for years.

The western area was once considered the 'golden' land within the capital's real estate market, reported Kinh tế & Đô thị newspaper.

For more than a decade, many big real estate businesses invested into countless projects, on the back of land price increases and wanting to see people’s lives improve.

However, after a period of 'hot' growth, the real estate market in the region withered as many shortcomings were exposed. Dozens of new urban residential areas comprising thousands of apartments, houses and villas have now been abandoned for years, turning hundreds of millions of US dollar-projects into ghost towns, while the supply of housing for low-income people continues to be seriously lacking.

Some of those notable ghost towns are Nam An Khánh Urban Residential Area, Sơn Đồng Centre and Vườn Cam Project in Hoài Đức District.

The Nam An Khánh Urban Residential Area on a total planned land area for construction of nearly 190ha with a total investment of VNĐ2.6 trillion (US$100 million) was started in 2008 by Sông Đà Urban and Industrial Park Development Investment Joint Stock Company (Sudico) as the investor.

This is one of the projects with the largest number of abandoned houses in Hoài Đức District.

According to Professor Dr Đặng Hùng Võ, along with increase of population in urban areas and rapid process of urbanisation, real estate has become a safe and high profit investment channel.

“Therefore, at all times, investors pay special attention to this product and in fact, many people can also get rich thanks to the real estate business,” Hùng told kinhtedothi.vn.

“Land investment and speculation have distorted the real estate market with prices continuously being pushed up, not matching the actual value,” he said.

In fact, many projects have become ghost towns, because investors buy and sell the properties continuously to make a profit without any real need to have anyone live there.

The abandoned projects have lead to deterioration of the works and waste of land.

“Land speculation will result in unpredictable consequences for socio-economic development, such as economic stagnation and unsecured social welfare,” Hùng said.

“Therefore, levying tax on real estate ownership is most effective solution to gradually minimise and wipe out land speculation by people and businesses,” he said.

According to experts, it is undeniable that the real estate market is being greatly affected by speculation, but objectively, there are still many other problems, including shortcomings and lack of synchronisation and unity in the legal systems for land and housing in Việt Nam.

Legal regulations are always changing, causing a lack of consistency in the implementation process, which not only wastes time and money for businesses, but also makes State officials avoid responsibility leading to many housing projects being stalled.

The head of the Urban Management Department of Hoài Đức District Nguyễn Trọng Tấn, said that after former Hà Tây Province merged into Hà Nội, all housing and urban area projects in the area that were previously approved must be re-filed according to the new planning laws.

Along with that, some mechanisms and policies on compensation and site clearance of Hà Nội are also different from Hà Tây Province, so after 17 years of merging, many projects, although having completed construction of a large area, still have areas that cannot be cleared, said Tấn. VNS