Many people in Hanoi have been buying apartments in old residential buildings for fear of fraud and slow construction progress in new housing projects.
While many apartments and condos have a fallen in price and have had a difficult time finding tenants, older residential buildings have maintained their prices.
Tao, a parent from Ha Tinh Province was looking for an old apartment for his child, who is going to a university in Hanoi. The apartment he chose is 34 square metres and located in old residential building in Hoang Quoc Viet Street with price of VND1.2 billion (USD57,000).
Tao said he chose this run-down apartment over other new ones because it is inside the city.
Older apartments near and around city centre, in districts such as Hai Ba Trung or Ba Dinh, often are priced from VND60-70 million per square metre. An apartment in Ba Dinh District, on the other hand, with only 17 square metres has an offering price of VND1.5 billion.
Older apartments in the city are regularly sold for five to six times than those in outlying districts. The slump in real estate market has not had much effect on this particular sector.
The reasons for such high prices despite the bad state and small size of many of these buildings seems to be people’s desire to live close to the city. To many, the increased prices are worth paying to maintain convenience in their daily lives.
Not only the customers, but many brokers and investors also prefer older residential buildings because of the notoriously slow pace of construction on new projects.
“I know this apartment is not very pleasant, but at least I don’t have to worry about waiting a long time for a place to live,” Tao said.
According to many experts, the prices on these old apartments have never dropped. Many rich people prefer to buy modest apartments in run down buildings either to keep or resell them.