VNRE - Vietnam, the 120th poorest nation worldwide, is among top 20 countries having the most expensive realty markets, state media reported, citing an official.
The realty prices in the Southeast Asian country, particularly in Hanoi, have repeatedly risen amid the stable demand which is mostly for low-cost housing projects, said Nguyen Tran Nam, deputy minister of the Ministry of Construction.Nam explained the paradox for speculation as investors from different localities pouring money into realty projectd in Hanoi on expectations that it would rise due to higher demand.
Many rich people in provinces from northern to central regions have invested in land and houses to serve later study, work and residence of their children, Nam said, adding that investors of each province bought about 50 apartments and houses in Hanoi per year.
Meanwhile, Vu Thanh Tung, director of Vietnam Investment Consulting and Construction Designing JSC attributed the situation to fake demand caused by realty investors. Realty developers sometimes caused fake thin supply to attract consumers, Tung explained.
High cost and bank interests also cause higher output prices, Tung added, saying that the realty prices in Hanoi double that in the southern economic hub of Ho Chi Minh City and five to ten times higher than that in the southern province of Binh Duong, the leading locality for FDI attraction.
Source: VCCI & VEF
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Vietnamese retail housing is governed by the government and is not valued by an open market, hence the reason why Hanoi properties are so expensive. The GDP per capita is only 20 US dollars per month, it is very hard to justify an average median price of 1 million USD for Property in Hanoi. That coupled with the inability for foreigners to purchase property further exacerbates the justification that Vietnamese property prices deserve the high prices that they so display. Load of rubbish.
Hanoi property prices are affected by speculators, not governed by the government.
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