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After the fire, flats are out of fashion   2010-03-16 - VietNamNet

The deadly fire that broke out at the 18 story JSC 34 building on Hanoi’s Le Van Luong Street on March 10 has made some ‘cliff dwellers’ think twice about where they should live. The prices of apartments have dropped sharply, reports VietNamNet. 


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Nguyen Dinh Thang, the owner of an apartment at the nearby Licogi 34 building, related that after the fire at JSC 34, he got so frightened that he has decided to find a house ‘on the face of the earth’ to live in.  However, he has not received any replies to his ‘for sale’ advertisement.


Thang says that several months ago, before the fire at JSC 34 building, apartments were selling like hotcakes. The price of apartments in the Licogi building hovered around 28-30 million dong per square metre. However, it’s quite different now: people are shy of apartments.


All over Hanoi the sale of apartments has slowed.  The Trung Hoa Nhan Chinh, Nam Trung Yen and Van Quan urban area projects are suffering.


According to VietNamNet informants in the Hanoi real estate sector, investors no longr dare risk pouring money into high rise buildings because it’s become more difficult to sell apartments.


Cao Xuan Cuong of TimesLand Real Estate says that people are disenchanted with apartments for several  reasons. First of all, they cannot lease the apartments to businesses any more. A decision by the Ministry of Construction has prohibited the use of apartments as offices .  Second, people have decided that it is now too safe to live in high rise buildings, because developers typically have not paid appropriate attention to the fire prevention and firefighting system.


Pham Trung Ha, Director of Hoa Phat Real Estate Group says that the apartment market has become gloomy due to the psychology of buyers.  Ha thinks  that the prices of apartments in Trung Hoa Nhan CHinh, Nam Trung Yen or Van Quan new urban area are flat because they were overly high already. Further, the trouble at JSC 34 building on Le Van Luong Street has kept many investors away from apartments, which probably led to the sharp fall of apartment prices.


Ha predicts that low quality apartment blocks which have many problems in management will suffer most.  Even so, he says, many real estate developers will feel the impact of the JSC 34 fire.  Many developers have planned to launch their products onto the market with the relatively high starting prices of $1300-1400 per square metre. However, in current conditions, that’s a hard sell.

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