The prices of mini apartments in Hanoi has surged after a decision to grant ownership titles to individual small apartments.
The decision was meant to help low-income families to buy their first property, but demand increased dramatically after the decision, with home buyers and investors attracted to the prospect of capital gains, analysts said.
Also, mini apartment sales don't have to go through a property transaction centre.
To qualify as mini apartments, there must be at least two floors to the building with two or more apartments measuring at least 30sq.m on each floor.
"Demand for mini apartments increased by 40 percent and the price increased by about 20 percent," www.batdongsan.com.vn director Le Xuan Truong said.
Prices were now between VND750 million (US$39,000) to VND1.2 billion ($60,000), Truong said.
Each apartment could bring the developer a profit of between VND150 million ($7,800) and VND200 million ($10,000)," he said.
The high demand has attracted investment from small developers.
Developer Dinh The Toan said he built a five-floor mini apartment building with 12 apartments on an area of 150sq.m. After the decision was released, the apartments increased in value by VND300 million ($15,000) to around VND900 million ($45,000) each.
Quang Minh Construction and Investment Joint Stock Company spent VND10 billion ($526,000) to buy 200sq.m of in Cau Giay district to build 20 apartments.
We predicted demand would increase and we have not been disappointed, the company's marketing director Pham Manh Duong said.
Former deputy minister of Natural Resources and Environment Dang Hung Vo said the decision may relieve the accommodation shortage and provide an opportunity for low income families, but we may live to regret it.
He said such high-density living down small lanes was not accompanied by the development of extra infrastructure, such as water, electricity, sewerage, roading, extra schools, medical centres and open spaces.
They may turn into slums or ghettos in the future, Truong said.
