Housing prices plunge in Vietnamese capital

When the global economy melts down at the same time due to the credit bubble, over supply and over speculation, what happens? Well, folks, let's find out..

Property prices in Hanoi went into a slump two weeks ago and are predicted to drop further. Trading volumes have been low with buyers willing to wait on further falls (sound familiar Phoenix?).

Prices of all kinds of apartments and private houses have fallen by several million dong (1 million dong = US$63) per square meter.

Apartments in Linh Dam, Dinh Cong, and Me Tri Thuong have become cheaper by a few dozens of millions of dong while owners of luxury high-rises like Ciputra and Ngoc Khanh are offering their apartments at cost price or even less.

Apartments are commonly coming into the market at a mere VND400-500 million ($25,160- 31,400). Private houses, whose prices did not fall for so long, too have begun to lose their sheen, with prices dropping from a few dozens to hundreds of millions of dong.

As a result of the plunging rates the property market has witnessed some transactions after remaining in limbo for over a year. But most deals are for low-priced, small houses worth VND500-800 million. Ba Dinh, Hai Ba Trung districts in the inner-city and Long Bien, Hoang Mai and Cau Giay districts on the outskirts witnessed some activity.

Traders said, however, there was some hesitancy with people hoping the rates would drop even further. The fall in prices, especially of apartments, was likely to spread to all parts of the city, Dang Hung Vo, Deputy Minister of Natural Resources and Environment, said.