After warming up the real estate market, the 'mini-apartment' sector is currently facing a slump as housing prices in other sectors go down.
Model of a mini-apartment in Gia Lam District, Hanoi
The price of a mini apartment averages around VND20 million (USD960) per square metre, topping off at VND30-35 million per square metre. In comparison with other sectors of the real estate market, these prices are not extraordinarily low. This has led to buyers choosing to purchase larger homes.
To cope with the slump, many investors have rented out their apartments, posted advertisements or sold off. Vicland Real Estate Trading Floor offers an apartment in Me Tri Thuong urban area at VND950 million for a 45.5 square metre apartment, fully furnished. They reduced the price to VND20 million on November 20. The price for such apartments in Bui Xuong Trach were reduced to VND780-930 million.
Compounding the problem is the number of current residents trying to sell their homes. A resident in My Dinh urban area offered their apartment for VND700 million, including the furniture. A mini apartment in Dong Ngac was also offered for just VND600 million.
The average price have been slashed in half compared to last year.
Hai, an investor said he contributed capital to build mini apartment block but the sector is now in difficulty. He is trying to recover capital by sitting on empty apartments, valued at VND300 million each, but customers are dwindling.
Enterprises target mini apartment sector
According to Decree 71, households and individuals will be permitted to build mini apartment buildings meeting a minimum required floor space of just 30 square metre. However, enterprises will be restricted to constructing apartments with a minimum floor area of 45 square metre.
Mini-apartments built by individuals often not up to codes, such as fire safety, public services and construction standards. Meanwhile the enterprises who could afford to build such housing often do not offer small apartments.
Nguyen Van Duc, representative of Dat Lanh Real Estate Company said the decree is not fair and the people can benefit more if enterprises were allowed to build 30 square metre apartments.
The Ho Chi Minh City Real Estate Association agreed that the Government should allow enterprises to build 25-70 square metre apartments for bachelors and small families.
