Business » Real estate
Luxury homes on the cheap lease amid recession
  • | DTCK, dtinews.vn | May 15, 2012 03:09 PM
Luxury houses and apartments are being leased for much less now that the real estate market is in a slump. 

 

Investors are compelled to lease out luxurious houses at cheap prices 

When the real estate market was strong, investors could did not want to sell because of rampant speculation. Now they have been forced to lease their properties at low prices as a way to recover some of their investment until the market recovers. Nobody is sure, however, when such a recovery will take place.  

Currently, rental fees for homes, storage and office space in the 'luxury' market are around VND8-10 million (USD383-479) per month for an area of 300-400 square metres. Some homes with incomplete interior designs are cheaper. 

Nguyen Van Duc, a representative of a trading centre in Van Phu urban area, said that although properties there have been the market for more than 6 months, they are failing to attract interest because of the lack of residents. 

Houses in other urban areas, such as Van Khe, Van Quan, Mo Lao have been left abandoned.

Business has also been tough, although to a slightly lesser extent, in more populated areas. 

Properties in Van Khe are being leased for VND8-15 million (USD383-718) a month, while in Vietnamese European Village in Mo Lao Commune is VND10-16 million (USD479-766) a month. Prices in Van Quan area are higher, at USD1,500-2,000 a month, because they offer better infrastructure and an established community.

To many investors, these prices have been a disappointment, and makes it difficult for them to recover the billions of VND they spent, much of which was borrowed. 

Duc said this situation could continue for a long time, since even low rents could only be a short-term solution. 

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