Hanoi real estate market: both western and eastern areas can bring profit

VNRE - Real estate experts believe that the western area of the city will still be the most profitable area for investors in the time to come. However, the eastern area is also believed to bring good profit.

Though the master programme for Hanoi development by 2030 has not been approved yet, the outlines of the programme and the socio-economic development of the city can show investors which areas of the city can bring highest profits.

According to Pham Thanh Hung, Deputy General Director of Cen Group, the strip of land in the western area of the city will still be the “hot point” for real estate developers for many years. Especially, after the transport system in the area has been upgraded with Thang Long Boulevard and Le Van Luong roadextended , the prices have been increasing steadily. Experts have anticipated that when the Highway No. 32 expansion finishes, they will increase further.

In thepast few years, the real estate prices in this area have increased by 30-40 percent per annum. The land of Tay Do Villas project in Duong Noi urban area was traded at 23-30 million dong per square metre several years ago, while the price has soared to 40-50 million dong per square metre. in Van Khe urban area villas and semi-detached houses are now offered at 60-70 million dong per square metre.

However, experts see investment opportunities not only in the western part of the city. The eastern part has also become the target of real estate investors in recent years. Nguyen Xuan Dao, Director of Vietnam Property, a real estate consultancy firm, said that the land price there has been increasing over the past few years, which can bring to investors the profit which is in no way smaller than from the land plots in the western area.

A land plot in Ngoc Thuy Commune in Gia Lam District, for example, was priced at five million dong per square metre in late 2007, but now it can be sold for 35-40 million dong per square metre.

According to Dao, the eastern area of the city, especially Long Bien District, which is just 2-5 kilometres away from the city centre, Can be a promising investment. Besides, the value of the areas bordering with industrial zones or urban areas have been increasing day by day.

Two years ago, the land in Da Ton area was priced at 3-5 million dong per square metre only, but the price has soared to 15-16 million dong per square metre. Some landlords even set a sky high price at 20 million dong per square metre, and the prices are believed to increase further when Ecopark urban area is completed.

With the big advantages of the big land fund and the advantageous location (the area is on the intersection of important transport routes), the eastern area of Hanoi has become the target of many foreign investors.

A series of big real estate projects have been kicked off to form up the chain of modern new urban areas, including Hanoi Garden City (31 hectares), Gia Lam scientific urban area (400 hectares) and Ecopark (500 hectares).

The potential of the eastern area of the city have been valued by the upgrading of the infrastructure system. In the area, Thanh Tri and Vinh Tuy bridges have become operational, while transport routes are being expanded and upgraded, including the dyke road on the left of Red River, 5B Highway and the inter-province road Hung Yen-Hanoi which runs through Ecopart and links with Thanh Tri Bridge. With so many projects under implementation, it will be easier to travel to the city centre.

In October 2010, the first phase of building the belt road No. 3 was finished, and the stretch of road from My Dinh area to Phap Van viaduct, linking with Thanh Tri bridge, was opened. This can be seen as connecting the eastern and western areas.

Matthew Powell, Director of the Hanoi branch of Savills, a real estate consultancy firm, said that in principle, the real estate prices will increase when the transport conditions are improved. However, the real estate prices in the eastern area, though having been increasing considerably, are still lower than the prices in the western areas. And this can bring large profits to investors: they do not have to inject too much money, but the profitability will still be high.

Source: MONRE